MCO
Moody's Corporation$452.23
Sell
Target $364.59
Report: Mar 13, 2026Financial Services • Financial - Data & Stock Exchanges • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$452.23-19.4%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$364.59
(19% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$546.88
52 Week Low$378.71
Avg. 3 Month Volume1.35M
Efficiency
LTM Gross Margin74.4%
LTM EBITDA Margin49.5%
LTM EBIT Margin43.3%
LTM Operating Margin43.4%
LTM ROA15.9%
LTM ROE62.8%
LTM ROIC35.4%
LTM ROCE26.6%
Capital Structure
Market Cap (MM)$77.3B
Enterprise Value (MM)$82.3B
Shares Outstanding177.90M
Total Debt (MM)$7.35B
Cash & Equivalents (MM)$2.38B
LTM Net Debt (MM)$4.97B
LTM Net Debt/EBITDA1.3x
Growth
TTM Rev. Growth8.9%
Last 3-Yr Rev. CAGR12.2%
Last 3-Yr EBITDA CAGR18.1%
Last 3-Yr EPS CAGR22.5%
Valuation
Street Target Price$546.10
LTM EV/Revenue10.7x
LTM EV/Gross Profit14.3x
LTM EV/EBIT24.6x
LTM EV/EBITDA21.5x
LTM P/E31.5x
LTM EV/FCF32.0x
LTM P/FCF30.0x
LTM P/TB10.2x
LTM P/B19.1x
Dividend Yield0.9%
Payout Ratio27.4%
Executive SummarySituation: Current price is $452.23 versus fair value $364.59 (-19.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Normalization of Global Debt Issuance As the pull-forward of demand from 2024 fully unwinds, quarterly revenue misses in the MIS segment will likely force a re-evaluation of the current 32x P/E multiple. Bear case centers on Structural Decline in Public Debt Issuance A permanent shift toward private credit markets where Moody's has less regulatory-mandated pricing power could impair the MIS segment's long-term return on capital. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The bull case rests on the 'hidden' value of Moody's proprietary datasets for training financial LLMs and a secular tailwind in private credit ratings, which grew over 60% in recent quarters. Proponents argue that the Analytics division is undervalued as a pure-play AI data provider.
Bear Case
The bear case focuses on structural declines in global debt issuance due to prolonged high interest rates and the risk of moat erosion from increased regulatory scrutiny on ESG and AI methodologies. Furthermore, the 181% debt-to-equity ratio and negative tangible book value create a fragile balance sheet if cash conversion continues to slip from 138% to 118%.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Normalization of Global Debt Issuance As the pull-forward of demand from 2024 fully unwinds, quarterly revenue misses in the MIS segment wil...
Near-Term (0-6 months)Impact: High
MA Subscription ARR Deceleration If the AI-driven growth narrative fails to materialize in the form of 10%+ ARR growth, the market's 'tech-p...
Long-Term (18+ months)Impact: Moderate
Moody's is relevant for analysis now because it is trading near its 52-week high ($546.88) despite a clear deceleration in its core growth m...
Primary Risks
Concern: Medium
Structural Decline in Public Debt Issuance A permanent shift toward private credit markets where Moody's has less regulatory-mandated pricin...
Concern: Low
Balance Sheet Fragility With a 181% debt-to-equity ratio and negative tangible book value, any sustained decline in FCF conversion could lea...
Concern: Medium
The stewardship verdict is 'Adequate.' The board provides strong oversight with members like Bruce Van Saun (Citizens Financial CEO) bringin...
Recent Activity
2026-02-18SEC Filing (8-K)
+6.51%Moody's Corporation reports Q4 and full year 2025 results, providing 2026 outlook
2025-04-04Market Movement
-9.03%Market/Sector Move -9.03%
2024-02-13SEC Filing (8-K)
-7.94%Moody's reports Q4/FY 2023 results and provides 2024 outlook
2022-10-25SEC Filing (8-K)
+5.16%Moody's reports Q3 2022 results with revenue decline and updated 2022 guidance
2022-02-11SEC Filing (SC 13G/A)
-5.10%Vanguard Group reports 7.27% ownership in Moody's Corp.
Valuation Table
9.8/10Decision Grade
Scenario Range
$253
Bear
$322
Base
$376
Bull
$452