Moody's Corporation (MCO)
Financials · $88.1B market cap · SEC CIK 0001059556
ahead of 55% of the S&P 500 · #37 of 76 in Financials
Next reports on Feb 16, 2027, after the close, with analysts expecting $3.62 in earnings per share.
52-week range $402.28 to $546.88. 7% below its 52-week high and 27% above its low.
The case for MCO
- Earns 86% on shareholder equity.
- 35% of revenue drops through to net profit.
- Revenue growing 9.0% year over year.
- Earnings per share up 31.9%.
- Gross margin of 75% absorbs cost shocks.
The case against
- Pricey for its growth: 30.6× earnings, where 8% a year of growth plus a 0.8% dividend would justify about 21×.
- Priced at 24× book value. Very little hard asset backing here.
- Priced at 10.8× sales with revenue growing only 9.0%.
- Stability is weak (38/100): beta 1.32, a 26% swing over the year.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Financials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 33 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 52 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 92 |
| Momentumhow the price has behaved lately | 64 |
| Stabilityhow violently it moves, what it owes and what it pays you | 38 |
- Its debt and cash flow are not scored, as for every company in the Financials sector: for banks, insurers and brokers, borrowing is the business.
- Each factor except momentum is half fixed thresholds, half rank among the 76 Financials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +9.0% |
|---|---|
| Over 5 years | +7.5% a year |
| FY2025 revenue | $7.7B (+9%) |
Free cash flow
Is it generating real cash? Not meaningful for a financial company
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 75% |
|---|---|
| Operating margin | 48% |
| Net margin, FY24 → FY25 → now | 29.0% → 31.9% → 35.3% |
Debt vs. cash
Is the balance sheet healthy? Not judged for a financial company
| Cash | $2.4B |
|---|---|
| Long-term debt | $7.0B |
| Net debt | $4.6B |
Valuation
Is the stock price reasonable? A bit pricey
| P/E | 30.6× |
|---|---|
| Fair P/E for its growth | 21× |
| Forward P/E | 27.0× |
| EV / EBITDA | 21.3× |
At 30.6× earnings it trades above the 21× that 8% a year of growth plus a 0.8% dividend would justify. It is judged on earnings alone: its book value is not what it earns on, as it would be for a bank or insurer.
The financials, five years deep
Pulled from Moody's Corporation's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $7.7B | $7.1B | $5.9B | $5.5B | $6.2B |
| Change on the year | +9% | +20% | +8% | −12% | — |
| Free cash flow | |||||
| Free cash flow | $2.6B | $2.5B | $1.9B | $1.2B | $1.9B |
| Of revenue | 33% | 36% | 32% | 22% | 30% |
| Profit margins | |||||
| Operating margin | 43.4% | 40.6% | 36.1% | 34.4% | 45.7% |
| Net margin | 31.9% | 29.0% | 27.2% | 25.1% | 35.6% |
| Debt vs. cash | |||||
| Cash | $2.4B | $2.4B | $2.1B | $1.8B | $1.8B |
| Long-term debt | $7.0B | $6.7B | $7.0B | $7.4B | $7.4B |
| Net cash (debt) | −$4.6B | −$4.3B | −$4.9B | −$5.6B | −$5.6B |
What Moody's Corporation says it does
Background As used in this report, except where the context indicates otherwise, the terms “Moody’s” or the “Company” refer to Moody’s Corporation, a Delaware corporation, and its subsidiaries. The Company’s executive offices are located at 7 World Trade Center at 250 Greenwich Street, New York, NY 10007 and its telephone number is (212) 553-0300. THE COMPANY Company Overview In a world shaped by increasingly interconnected risks, Moody's data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. Moody’s offerings are distinguished by our vast proprietary and curated data and validated analytical models, which provide the trusted foundation that enable our customers to navigate an increasingly complex risk landscape. Moody’s solutions enable the transformation of information into decision-grade intelligence, which is deeply interconnected across risk domains. Moody's also…
Risk factors MCO lists in its 10-K
- Moody’s Faces Risks Related to Laws and Regulations that Affect the Financial Industry, Including the Credit Rating Industry, Moody's Businesses and Moody’s Customers
- The Company Is Exposed to Risks Related to Protection of Confidential and Personal Information
- The Company Faces Exposure to Litigation and Government Regulatory Proceedings, Investigations and Inquiries (Including Competition Market Studies) Related to Rating Opinions, Analytics Services and Other Business Practices
- The Company Is Exposed to Risks Related to Its Compliance and Risk Management Programs
- Moody’s Faces Risks Related to Intellectual Property Rights
- Moody’s Faces Risks Related to Tax Matters, Including Changes in Tax Rates or Tax Rules
- The Company is Exposed to Legal, Economic, Operational and Regulatory Risks of Operating in Multiple Jurisdictions
- Moody’s Operations are Exposed to Risks from Infrastructure Malfunctions or Failures
- The Company Is Exposed to Risks Related to Cybersecurity and Protection of Confidential Information
- The Introduction of Competing Products, Technologies or Services by Other Companies Can Negatively Impact the Nature and Economics of the Company’s Business
- The Company Faces Increased Pricing Pressure from Competitors and/or Customers
- The Company Is Exposed to Reputation and Credibility Concerns
- Our Reputation or Business Could Be Negatively Impacted by Sustainability Matters and Our Reporting of Such Matters
- Moody’s Is Exposed to Risks Related to Loss of Skilled Employees and Related Compensation Cost Pressures
- Our business could be negatively impacted by physical and transitional climate risks