Moodys Corp (MCO) stock analysis

P/E below its 5-year median

Moodys's P/E of 31.4 is below its own 5-year median of 40.6.

P/E above the industry

Moodys's P/E of 31.4 is above the Business Services median of 26.9.

EV/EBITDA below its 5-year median

Moodys's EV/EBITDA of 22.8 is below its 5-year median of 27.1.

P/B above the industry

Moodys's price-to-book of 27.16 is above the Business Services median of 2.98.

Trading below fair value

The share price of $514.93 is below our fair value estimate of $525.45.

Margin of safety under 20%

The price is 2.0% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 12.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 22.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 28.5% over the last twelve months, against a 5-year average of 6.7% a year.

Growing slower than the industry

Revenue grew 9.0% over the last twelve months; the Business Services median is 9.1%.

Guidance lowered

Moodys lowered its Full Year 2026 Non-operating (Expense)/Income (2) outlook on Oct 21, 2026.

Gross margin improving

Gross margin was 74.6% over the last twelve months, against 73.8% a year earlier.

Return on equity over 15%

Return on equity was 79.8% over the last twelve months and averaged 67.0% over five years.

Return on capital over 10%

Return on invested capital was 33.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Moodys's return on equity of 79.8% is above the Business Services median of 1.4%.

Earnings grew over 5 years

Net income grew 6.7% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 35.3% over the last twelve months, against a 5-year average of 29.8%.

Net margin above the industry

Moodys's net margin of 35.3% is above the Business Services median of -1.7%.

High debt

Debt is 211% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 409% five years ago to 211%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 48.2% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.29 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 7.95; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Moodys paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Moodys yields 0.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 24.6% of net income.

Covered by free cash flow

Dividends take 23.8% of free cash flow.