Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MOODY'S CORP has improved earnings per share by 9.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOODY'S CORP increased its bottom line by earning $3.03 versus $2.49 in the prior year. This year, the market expects an improvement in earnings ($3.56 versus $3.03).
- The gross profit margin for MOODY'S CORP is currently very high, coming in at 72.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.74% is above that of the industry average.
- Net operating cash flow has significantly increased by 226.77% to $202.60 million when compared to the same quarter last year. Despite an increase in cash flow of 226.77%, MOODY'S CORP is still growing at a significantly lower rate than the industry average of 642.07%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 79.35% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
Moody's Corporation provides credit ratings; and credit, capital markets, and economic related research, data, and analytical tools worldwide. Moody's has a market cap of $14.9 billion and is part of the services sector and diversified services industry. The company has a P/E ratio of 21.00, above the S&P 500 P/E ratio of 18.00. Shares are up 32.3% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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