Moody's (MCO) AI Stock Analysis

• Market Cap: $78.73B
• Dividend Yield: 0.81%
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): 38.9
• Beta (1Y): 1.24
• Revenue Growth: 19.81%
• EPS Growth: 28.97%
• Country: US
• Employees: 16,000
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 2.62
• Shares Outstanding: 179,889,330
• 10 Day Avg. Volume: 1,409,660
• 30 Day Avg. Volume: 1,077,973
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 11.67
• Price to Cash Flow (P/CF): 30.70
• P/FCF Ratio: 28.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $507.07
• Price Target Upside: 15.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

Moody's strong financial performance and positive earnings call sentiment are significant strengths, driving a favorable overall score. However, technical indicators suggest caution with potential short-term weaknesses, and high valuation metrics point to premium pricing. Despite these concerns, Moody's robust market position and strategic focus on AI and technology underpin a positive long-term outlook.

Positive Factors

Earnings

Moody's first-quarter results came in above expectations, driven by revenue upside and strong cost control.

Structured Finance Growth

Private Credit strength drove structured finance issuance and rose notably, indicating robust growth in this segment.

Negative Factors

Debt Issuance Outlook

Management lowered 2025 issuance guidance due to slowness observed, reflecting a more cautious outlook for the year.

Market Uncertainty

Higher than expected tariffs have increased financial market uncertainty, leading to a more muted ratings outlook.

Moody's Business Overview & Revenue Model

Company Description

Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as and structured finance securities. This segment provides ratings in approximately 140 countries. Its ratings are disseminated through press releases to the public through electronic media, including the internet and real-time information systems used by securities traders and investors. This segment has rated approximately 5,000 non-financial corporates; 3,600 financial institutions; 16,000 public finance issuers; 145 sovereigns; 47 supranational institutions; 459 sub-sovereigns; and 1,000 infrastructure and project finance issuers, as well as 9,100 structured finance deals. The Moody's Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets; and offers subscription based research, data, and analytical products comprising credit ratings, credit research, quantitative credit scores and other analytical tools, economic research and forecasts, business intelligence and company information products, commercial real estate data and analytical tools, and on-line and classroom-based training services, as well as credentialing and certification services. It also offers offshore analytical and research services with learning solutions and certification programs; and software solutions, as well as related risk management services. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody's Corporation in September 2000. Moody's Corporation was founded in 1900 and is headquartered in New York, New York.

How the Company Makes Money

Moody's Corporation generates revenue primarily through its two main segments: Moody's Investors Service and Moody's Analytics. The MIS segment is a major revenue driver, earning fees from issuing credit ratings for a diverse range of debt obligations and securities. These ratings are essential for issuers looking to attract investment, as well as for investors assessing risk. Moody's Analytics complements this by offering subscription-based services for risk management software, tools, and data solutions. Additionally, Moody's engages in strategic partnerships and acquisitions to expand its service offerings and geographic reach, further bolstering its revenue streams. The company's reputation and established position in the financial markets enhance its ability to maintain and grow its client base, ensuring a steady income flow.

Moody's Financial Statement Overview

Summary

Moody's financial performance is impressive, with strong revenue growth and robust profitability margins. The company effectively converts revenue into profit and cash, indicating strong operational management. Despite high leverage posing potential risks, the company's high ROE and effective cash flow management mitigate these concerns.

Income Statement

Moody's has shown strong revenue growth with a 19.8% increase from 2023 to 2024. Gross profit margin remains robust at 72.6%, and net profit margin is strong at 29.0%. The EBIT and EBITDA margins are also solid at 40.6% and 40.8%, respectively, indicating efficient cost management and strong operational performance.

Balance Sheet

The company has a high debt-to-equity ratio of 2.17, reflecting significant leverage, which could pose risks. However, ROE is impressive at 57.7%, showcasing effective use of equity to generate profits. The equity ratio is moderate at 23.0%, suggesting a balanced asset structure with a focus on leveraging debt efficiently.

Cash Flow

Operating cash flows are strong with a 31.9% increase from 2023 to 2024. The free cash flow to net income ratio is favorable at 1.38, indicating efficient conversion of profits into cash. The operating cash flow to net income ratio is also healthy at 1.38, reflecting robust cash generation capabilities relative to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.09B	5.92B	5.47B	6.22B	5.37B
	Gross Profit
5.14B	4.23B	3.85B	4.58B	3.90B
	EBIT
2.88B	2.14B	1.88B	2.84B	2.39B
	EBITDA
3.47B	2.61B	2.33B	3.09B	2.66B
	Net Income Common Stockholders
2.06B	1.61B	1.37B	2.21B	1.78B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.97B	2.19B	1.86B	1.90B	2.70B
	Total Assets
15.51B	14.62B	14.35B	14.68B	12.41B
	Total Debt
7.75B	7.42B	474.00M	560.00M	521.00M
	Net Debt
5.34B	5.29B	-1.29B	-1.25B	-2.08B
	Total Liabilities
11.78B	11.15B	14.35B	11.76B	10.65B
	Stockholders Equity
3.56B	3.32B	2.52B	2.92B	1.76B
Cash Flow		Free Cash Flow
2.84B	1.88B	1.19B	1.87B	2.04B
	Operating Cash Flow
2.84B	2.15B	1.47B	2.00B	2.15B
	Investing Cash Flow
-1.06B	-247.00M	-262.00M	-2.62B	-1.08B
	Financing Cash Flow
-1.45B	-1.58B	-1.21B	-122.00M	-351.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 439.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCO, the sentiment is Negative. The current price of 439.58 is above the 20-day moving average (MA) of 436.63, below the 50-day MA of 463.78, and below the 200-day MA of 470.15, indicating a bearish trend. The MACD of -10.42 indicates Negative momentum. The RSI at 45.95 is Neutral, neither overbought nor oversold. The STOCH value of 62.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCO.

Moody's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCO	75 Outperform	$78.73B	38.85	57.90%	0.81%	19.81%	28.97%
MORN	75 Outperform	$11.68B	31.80	25.11%	0.61%	11.60%	161.17%
FDS	73 Outperform	$16.09B	30.13	28.12%	0.98%	4.66%	11.15%
SPGI	73 Outperform	$146.38B	37.77	11.44%	0.78%	13.68%	49.90%
MSCI	64 Neutral	$41.05B	36.49	-117.99%	1.24%	11.67%	-0.89%
DNB	63 Neutral	$3.92B	―	-0.85%	2.27%	2.93%	39.49%
Sector *	63 Neutral	$12.06B	9.31	8.10%	79.51%	12.80%	-4.67%

Moody's Corporate Events

Moody’s Reports Strong Q1 2025 Performance

Moody’s Corporation reported a strong performance for the first quarter of 2025, with revenues reaching $1.9 billion, marking an 8% increase from the previous year. Both Moody’s Analytics and Moody’s Investors Service saw revenue growth of 8%, despite a 1% negative impact from foreign currency translation. The company also achieved record revenue in its Ratings franchise, driven by demand for high-quality credits and refinancing activities. Operating expenses rose by 9% due to investments, restructuring charges, and M&A activities. Moody’s updated its full-year guidance, projecting adjusted diluted EPS growth of 9% at the midpoint, reflecting its financial strength and commitment to long-term value creation amidst market volatility.

Spark’s Take on MCO Stock

According to Spark, TipRanks’ AI Analyst, MCO is a Outperform.

Moody’s Corporation scores a solid 78, driven by excellent financial performance and positive earnings call sentiment. The company’s strong revenue growth, profitability, and strategic investments highlight its robust operational management. However, the technical analysis indicates potential short-term weaknesses, and the valuation suggests the stock might be priced at a premium. Despite these concerns, Moody’s strong market position and positive long-term outlook support a favorable overall stock score.

To see Spark’s full report on MCO stock, click here.

Moody’s Announces New Chief Accounting Officer

On March 11, 2025, Moody’s Corporation announced that Caroline Sullivan, the Chief Accounting Officer and Corporate Controller, will depart from her position on April 1, 2025. Jason Phillips, who has been with the company since 2003 and has held various significant roles, will succeed her. This transition is expected to maintain stability in the company’s accounting operations, given Mr. Phillips’ extensive experience and involvement in key financial reporting and policy teams.

Moody’s Reports Strong Q4 2024 Financial Results

Moody’s Corporation reported strong financial results for the fourth quarter and full year 2024, with revenue increasing by 20% year-over-year, reaching $7.1 billion. The growth was driven by robust performance across its business segments, with Moody’s Investors Service revenue up 33% and Moody’s Analytics revenue increasing by 8%. The company attributed its success to strategic investments in its platform, data, and product innovation, as well as disciplined execution. For 2025, Moody’s forecasts high single-digit revenue growth and adjusted diluted EPS growth in the low-to-mid teens, reflecting continued strong demand for its services.

Moody’s Implements New Executive Severance Policy

On February 11, 2025, Moody’s Corporation’s Board of Directors implemented a new Executive Officer Cash Severance Policy. This policy requires stockholder approval for any new or amended executive officer arrangements that provide cash severance benefits exceeding 2.99 times the executive’s base salary plus target annual bonus, indicating a move towards greater shareholder involvement in executive compensation decisions.