MCO

MCO

Moody's Corporation

Platform / Network

★ Quality 90/100
Overvalued

Price today

$493.55

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A monopoly position

This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.

What this business is made of

90qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

Moody's sells the stamp without which your bond won't sell.

Moody's rates debt: corporate bonds, sovereigns, structured products. Every issuer pays for the rating because without it the bond doesn't sell well. It generates $7.7B in revenue, half ratings (MIS) and half analytics and data (MA), with FCF of $2.6B.

Regulatory duopoly with S&P. Institutional investors demand a rating from both, so an issuer can't skip them. The decades-long track record and accumulated trust can't be bought with capital — they're earned issuance by issuance.

Revenue history

$5.5B
2022
$5.9B
2023
$7.1B
2024
$7.7B
2025
$8.2B
2026
CAGR 5 años: +10%

From $5.5B to $8.2B in 4 years. The business grows steadily.

Where each $100 of sales goes

Revenue $7.7B · FY2025

Cost of sales$2.0B · 26%
Operations$2.4B · 31%
Taxes and other$892M · 12%
Net profit$2.5B · 32%

Of every $100 in sales, $68 goes to costs and operations; $32 is left as net profit (32% margin).

Catalysts and risks

Recovery in debt issuance volume as rates fall in 2025-2026.

Analytics segment (MA) grows double digits with recurring revenue and high margins.

Demand for ratings on private debt and expanding alternative credit markets.

⚠️

Ratings revenue tied to issuance cycles: in a bond drought, it falls fast.

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Debt of $7.0B against $2.4B cash in a higher-rate environment.

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Regulatory and litigation risk — regulators never forget 2008.

Charlie's note

Paying 27x for a duopoly with a 74% gross margin and a regulatory moat that can't be bought with capital is reasonable; the 6% growth is modest, so patience does the rest.

Analysis · June 2026

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