Debt exceeds twice its equity, so financial risk warrants a closer look.
Metrics · D/E ~238% · Current Ratio 1.19
💲Is the price expensive now?
Not cheap (fair to slightly pricey)
Because it is a good, popular company, those expectations are already priced in.
Metrics · P/E 30.0 · P/B 27.2
💡Operating margin 46.2% tops rival SPGI (42.5%). But ROE 76.9% mostly reflects buybacks shrinking equity to $3.0B, and P/B 27.2x has the same cause.
Compiled from public financial data. Not a recommendation to buy or sell any security. · Source: stockanalysis (margins, P/B, ROE are TTM; equity cross-checked against SEC EDGAR), as of 2026-07-23
Business Summary · Key Value Metrics
Together with S&P Global, Moody's forms the global credit-ratings duopoly. It runs two segments: MIS, which rates debt issuers, and MA, which sells risk-analytics software and data. Recurring revenue is 99% of MA's total (ARR about $3.7B). TTM revenue $8.16B, operating margin 46.2%, net margin 34.3%.
Current Price
$472.24
-3.57%-$17.46· Close 2026-07-23
Analyst Consensus Target (external reference)
$555.29
Avg. of 24 external analysts · stockanalysis (24-analyst consensus, Buy · high $610 / low $500)
P/E (TTM)
30.0x
TTM
ROE
76.9%
TTM · buybacks shrank equity
Operating margin
46.2%
TTM · above SPGI (42.5%)
P/B
27.2x
equity only $3.0B
Dividend yield
0.87%
quarterly dividend
Market cap
$82.5B
as of 2026-07-23
Economic Moat · Key Business Segments
Moody's and S&P Global split the ratings market as a duopoly. Issuers effectively need a rating to raise debt, so revenue tracks issuance: Q2 2026 issuance topped $2 trillion and MIS revenue reached $1.26B (+25% YoY) at a 68.3% adjusted operating margin. On the other side, MA draws 99% of its revenue from recurring contracts with ARR near $3.7B (+9% YoY), cushioning the business when issuance freezes (Source: company IR, stockanalysis).
Duopoly structure
Moody's and S&P Global divide the market; a century of rating history is the barrier.
Regulation as moat
Institutional mandates and capital rules require recognized ratings, fixing demand in place.
Recurring revenue at MA
99% of analytics revenue is subscription-based, ARR about $3.7B, damping the cycle.
Asset-light economics
No factories or inventory, so operating margin runs 46% and most cash returns to holders.
10-Year Financial Trends
Revenue compounded at a 9-year CAGR of +8.8% ($3.6B in 2016 to $7.7B in 2025). Net income +28.0% and EPS +29.2% look explosive, but that is base-year distortion: in Q4 2016 Moody's booked a ~$864M settlement with the U.S. DOJ and 21 states over RMBS ratings ($702M after tax, $3.62 a share), pushing 2016 EPS to $1.36. Reversing it implies ~$4.98: EPS CAGR +11.9%, net income +10.9%. In 2022 a rate spike froze issuance, cutting revenue 12% and margin to 34.4%; 2025 margin was 43.4%. Q2 2026 (July 22): revenue $2.19B (+15% YoY), diluted EPS $5.03 (Source: SEC EDGAR, U.S. DOJ, stockanalysis).
10-Year Growth
Revenue$7.7B · CAGR +8.8%
Operating Income$3.4B · CAGR +20.0%
EPS$13.67 · CAGR +29.2%
10-Year Valuation
P/E (year-end)37.4x · avg 37.6x
ROA15.5% · avg 12.3%
Operating Margin43.4% · avg 39.0%
📊 Annual Data Table (MCO) — expand/collapse
Year
Revenue (B$)
Op. Income (B$)
EPS ($)
P/E (x)
ROA (%)
Op. Margin (%)
2016
3.6
0.65
1.36
69.3
5
18.1
2017
4.2
1.82
5.15
28.7
11.6
43.3
2018
4.44
1.87
6.74
20.8
13.8
42
2019
4.83
2
7.42
32
13.9
41.4
2020
5.37
2.39
9.39
30.9
14.3
44.5
2021
6.22
2.84
11.78
33.2
15.1
45.7
2022
5.47
1.88
7.44
37.4
9.6
34.4
2023
5.92
2.14
8.73
44.7
11
36.1
2024
7.09
2.88
11.26
42
13.3
40.6
2025
7.72
3.35
13.67
37.4
15.5
43.4
— = no data for that year/metric (P/E omitted before EPS turned positive)
9-Year CAGR: Revenue +8.8% · Operating Income +20.0% (+9.2% ex-2016 settlement) · Net Income +28.0% (+10.9% ex-settlement) · EPS +29.2% (+11.9% ex-settlement)
Source: SEC EDGAR 10-K (revenue, operating income, net income, diluted EPS, total assets, equity); fiscal year-end closes from Yahoo Finance; cross-checked against stockanalysis. P/E is year-end close ÷ diluted EPS and matches stockanalysis for all five overlapping years (2021-2025). Because equity was negative from 2015 to 2017 under accumulated buybacks, ROA replaces the ROE series.
Mega-Cap Value Metric Comparison
Moody's 46.2% operating margin beats rival S&P Global's 42.5%, though its $8.2B of revenue is about half SPGI's $15.7B. The gaps in ROE (76.9% vs 13.9%) and P/B (27.2x vs 4.0x) reflect capital structure rather than business quality — years of buybacks cut Moody's equity to $3.0B, and the small denominator inflates both ratios at once (Source: stockanalysis, company IR).
Dependence on the issuance cycle— MIS revenue tracks debt issuance directly. When the 2022 rate spike froze issuance, revenue fell 12% and operating margin dropped to 34.4%. The same shock can recur.Source: company 10-K
●
Shrinking equity and P/B— Buybacks cut equity from $4.05B at end-2025 to $2.99B by March 2026 in a single quarter. ROE 76.9% and P/B 27.2x embed that shrinkage, so peer comparisons need care.Source: SEC EDGAR 10-Q
●
Regulatory and litigation history— Moody's paid roughly $864M in 2016 to settle DOJ and state claims over RMBS ratings. Ratings agencies face standing regulatory and litigation exposure.Source: U.S. DOJ press release
✦ ValueCrab Dashboard PreviewMCO $472.24 -3.57% · as of 2026-07-23
Q. What are the key value metrics for Moody's (MCO)?P/E (TTM) 30.0, ROE 76.9%, operating margin 46.2%, P/B 27.2, dividend yield 0.87%, and a 9-year revenue CAGR of +8.8% (Source: stockanalysis, SEC EDGAR, as of 2026-07-23).
Q. Doesn't a 76.9% ROE mean this is an outstanding business?Not on the number alone. ROE is net income divided by equity, and years of buybacks cut Moody's equity to $3.0B, shrinking the denominator. S&P Global, in the same business, posts a 13.9% ROE. Operating margin distorts less: 46.2% for MCO versus 42.5% for SPGI.
Q. Why were 2016 results so weak?Moody's settled with the U.S. Department of Justice and 21 states for about $864M over allegations it inflated pre-crisis RMBS ratings, booking $702M after tax ($3.62 per share) in Q4 2016. That pushed EPS down to $1.36; reversing it implies roughly $4.98.
Q. How does Moody's differ from S&P Global?Both are ratings duopolists. SPGI's $15.7B of revenue is about double Moody's $8.2B because it also owns index businesses (the S&P 500 among them) and commodity information. Moody's is more concentrated in ratings and risk analytics, and carries the higher operating margin at 46.2% versus 42.5%.