An independent two-stage DCF analysis by a frontier AI model.
"> Derived directly from the Compound Annual Growth Rate (CAGR) of Moody's historical financials over the last 5 years. This assumes the company can maintain its historical growth trajectory for the next 5 years.
"> Derived directly from the Compound Annual Growth Rate (CAGR) of Moody's historical financials over the last 5 years. This assumes the company can maintain its historical growth trajectory for the next 5 years.
"> The long-term growth rate applied after year 5. Derived as a percentage of the 10Y Treasury yield to approximate long-term nominal GDP growth, capped at 3.5% to ensure it does not exceed economic growth.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 2.3% | 2.8% | 3.3% | 3.8% | 4.3% |
|---|---|---|---|---|---|
| 2.3% | $9,147.26 | $7,718.00 | $6,675.03 | $5,880.38 | $5,254.81 |
| 2.8% | $10,080.65 | $8,372.07 | $7,158.72 | $6,252.56 | $5,550.02 |
| 3.3% | $11,226.18 | $9,147.26 | $7,718.00 | $6,675.03 | $5,880.38 |
| 3.8% | $12,665.44 | $10,080.65 | $8,372.07 | $7,158.72 | $6,252.56 |
| 4.3% | $14,528.00 | $11,226.18 | $9,147.26 | $7,718.00 | $6,675.03 |
■ Undervalued vs current price ■ Overvalued vs current price
Moody's ratings issuance is highly correlated with global debt issuance volume, which fluctuates based on interest rates and macroeconomic stability.
Credit rating agencies are heavily regulated. Changes in regulations or legal liabilities could negatively impact margins and cash flow.
Although forming a near-duopoly with S&P Global, competition for data, analytics, and non-rating services is intense.
A prolonged high-interest-rate environment could suppress corporate debt issuance over an extended period, slowing growth.
Moody's Corporation maintains a formidable economic moat built on an oligopoly in credit ratings and a rapidly expanding analytics business. The regulatory necessity of credit ratings creates immense switching costs and pricing power. With consistent free cash flow generation exceeding $2.5 billion and strong margins, the company is highly resilient. The ongoing expansion of Moody's Analytics provides a sticky, recurring revenue stream that perfectly complements the cyclical but highly profitable ratings business.
Moody's exhibits strong competitive momentum, leveraging its dual-engine growth model of ratings and analytics. The analytics segment provides steady, subscription-based revenue that offsets the cyclicality of debt issuance, while pricing power across both segments remains highly robust.
The durability of Moody's economic moat is exceptional, rooted in insurmountable regulatory barriers and the deeply embedded nature of its data within institutional workflows. It operates as an essential toll bridge for global capital markets.
Market sentiment remains positive, driven by the predictability of the Analytics business and anticipated tailwinds from global debt refinancing cycles. Management's capital allocation continues to prioritize shareholder value.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.