Moody's Corporation

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MCO : NYSE : Financial
$136.36 -0.38 | -0.28%
Today's Range: 135.71 - 137.32
Avg. Daily Volume: 780300.0
09/20/17 - 2:52 PM ET

Financial Analysis


MOODY'S CORP's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. MOODY'S CORP is extremely liquid. Currently, the Quick Ratio is 3.46 which clearly shows the ability to cover any short-term cash needs. MCO managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 13.30% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)1000.5928.9
EBITDA ($mil)497.0445.0
EBIT ($mil)464.1413.8
Net Income ($mil)312.2255.5


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)3367.22026.8
Total Assets ($mil)6536.35044.9
Total Debt ($mil)4887.13420.4
Equity ($mil)-679.8-600.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin71.4372.13
EBITDA Margin49.6747.9
Operating Margin46.3944.55
Sales Turnover0.590.68
Return on Assets7.4117.62
Return on Equity0.00.0
Debt Q2 FY17 Q2 FY16
Current Ratio3.692.64
Debt/Capital1.161.21
Interest Expense39.435.4
Interest Coverage11.7811.69


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)191.04192.25
Div / share0.380.37
EPS1.611.3
Book value / share-3.56-3.12
Institutional Own % n/a n/a
Avg Daily Volume803702.0776681.0

Valuation


HOLD. MOODY'S CORP's P/E ratio indicates a significant premium compared to an average of 21.01 for the Capital Markets industry and a significant premium compared to the S&P 500 average of 24.88. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MOODY'S CORP seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MCO 55.09 Peers 21.01   MCO 39.35 Peers 20.56

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

MCO is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MCO is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MCO 22.16 Peers 18.04   MCO 0.18 Peers 2.22

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MCO is trading at a significant premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MCO trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MCO NM Peers 3.76   MCO -45.07 Peers 55.04

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MCO's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MCO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MCO 6.72 Peers 4.09   MCO 11.29 Peers 19.17

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MCO is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MCO significantly trails its peers on the basis of sales growth

 

 

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