Moody's Corporation (MCO) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Moody's Corporation

Updated on October 31, 2026 · accounts published on October 21, 2026

A highly profitable, cash-generative business carrying a heavy debt load

Moody's trades at a P/E of 30.9× over the last 12 months, 13 % below its ten-year median of 35.5× but 139 % above its sector median.

• Is Moody's expensive or cheap? At 30.1× earnings, Moody's trades 13 % below its ten-year median P/E but 139 % above the median of its sector.
• How is the business doing? EPS grew 21 % over the last 12 months on 8.9 % revenue growth, with a 45 % operating margin above its 2014-2025 average.
• Is it a scalable, lightly leveraged business? Scalable, yes: Moody's passes four of five sector health tests. Lightly leveraged, no: debt is 2.29 times equity.
• How strong is the balance sheet? Debt stands at 2.29 times equity over the last 12 months, more than four times the 0.5 the sector considers prudent.
• What to expect from the next earnings? Analysts expect EPS of $3.62 for the quarter Moody's reports on February 17, 2027; 18 of 32 analysts rate the stock a buy.

Is Moody's expensive or cheap?

Over the last 12 months Moody's trades at a P/E of 30.9×, 13 % below its ten-year median of 35.5× and under its five-year average of 38.7×. In the last decade it has traded at a lower multiple only 32 % of the time, within a range from 19.8× to 59.6×. Against its sector the picture flips: the median financial services company trades at 13.0×, so Moody's carries a 139 % premium. A free cash flow yield of 3.5 % tells the same story: cheaper than its own history, still a premium stock. The shares sit 6 % below their 52-week high.

How is the business doing?

Over the last 12 months revenue rose 8.9 % while EPS climbed 21 %, so profits are growing more than twice as fast as sales. The operating margin of 45 % over the last 12 months matches fiscal 2025 and sits above the 43 % average of fiscal 2014-2025: the business keeps more of each extra dollar than it used to. The net margin is 35 %. Return on equity reaches 86 %, a figure that also reflects a small equity base, since the shares trade at 26.8× book value. Profitability is real, but part of that ROE comes from the balance sheet.

Is it a scalable, lightly leveraged business?

Financial services firms such as asset managers, brokers and exchanges are not banks, so the useful checks are revenue growth, margins and cash quality rather than loan books. Moody's clears them: revenue per share grew 8.5 % a year over fiscal 2020-2025 against a healthy threshold of 6 %, the fiscal 2025 operating margin of 45 % beats the 30 % bar, ROE of 86 % over the last 12 months tops 15 %, and free cash flow equalled 105 % of net income in fiscal 2025, above the 90 % mark. The one miss is leverage: debt to equity of 2.29 against a prudent ceiling of 0.5.

How strong is the balance sheet?

The balance sheet is the weak spot in an otherwise strong profile. Debt to equity of 2.29 over the last 12 months is far above the sector's 0.5 ceiling, and the thin equity base behind it also pushes P/B to 26.8×. Cash generation softens the concern, with free cash flow covering 105 % of net income in fiscal 2025. Shareholder returns are modest but consistent: the dividend yields 0.8 % over the last 12 months, has risen for 11 consecutive fiscal years through 2025, and the fiscal 2025 payout of 29 % of earnings leaves ample room to keep growing it.

What to expect from the next earnings?

On October 21, 2026 Moody's reported EPS of $4.14, 2.6 % short of the $4.25 expected, a miss that stands out against a record of beating estimates in 7 of the last 8 quarters. Analysts have trimmed slightly since: the 2026 EPS consensus fell 0.9 % in the last 30 days, from $16.93 to $16.77 across 16 analysts, and the revenue consensus slipped 0.6 %. Of the 32 analysts covering the company, 18 recommend buying, 13 holding and 1 selling. The February 17, 2027 report, expected at $3.62 per share, will show whether October was a one-off.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.