Moody's Corporation
Moody's Corporation Fundamental Analysis
Moody's Corporation (MCO) shows strong financial fundamentals with a PE ratio of 32.34, profit margin of 31.86%, and ROE of 62.81%. The company generates $7.8B in annual revenue with strong year-over-year growth of 19.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 80.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze MCO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentMCO demonstrates superior asset utilization.
Valuation Score
WeakMCO trades at a premium to fair value.
Growth Score
ExcellentMCO delivers strong and consistent growth momentum.
Financial Health Score
ModerateMCO shows balanced financial health with some risks.
Profitability Score
ExcellentMCO achieves industry-leading margins.
Key Financial Metrics
Is MCO Expensive or Cheap?
P/E Ratio
MCO trades at 32.34 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, MCO's PEG of 3.23 indicates potential overvaluation.
Price to Book
The market values Moody's Corporation at 19.62 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.33 times EBITDA. This signals the market has high growth expectations.
How Well Does MCO Make Money?
Net Profit Margin
For every $100 in sales, Moody's Corporation keeps $31.86 as profit after all expenses.
Operating Margin
Core operations generate 44.53 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $62.81 in profit for every $100 of shareholder equity.
ROA
Moody's Corporation generates $15.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Moody's Corporation generates strong operating cash flow of $2.92B, reflecting robust business health.
Free Cash Flow
Moody's Corporation generates strong free cash flow of $2.84B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $15.85 in free cash annually.
FCF Yield
MCO converts 3.51% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
32.34
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
19.62
vs 25 benchmark
P/S Ratio
Price to sales ratio
10.39
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.81
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.74
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.63
vs 25 benchmark
ROA
Return on assets percentage
0.16
vs 25 benchmark
ROCE
Return on capital employed
0.27
vs 25 benchmark
How MCO Stacks Against Its Sector Peers
| Metric | MCO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 32.34 | 18.86 | Worse (Expensive) |
| ROE | 62.81% | 847.00% | Weak |
| Net Margin | 31.86% | 4202.00% | Weak |
| Debt/Equity | 1.81 | 0.91 | Weak (High Leverage) |
| Current Ratio | 1.74 | 667.17 | Neutral |
| ROA | 15.53% | -21543.00% (disorted) | Strong |
MCO outperforms its industry in 1 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Moody's Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
52.84%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
50.70%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
76.42%
Industry Style: Value, Dividend, Cyclical
High Growth