Moody's Corporation

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MCO : NYSE : Services
$109.27 | %
Today's Range: 109.18 - 110.00
Avg. Daily Volume: 907,000
09/23/16 - 4:01 PM ET

Financial Analysis


MOODY'S CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. MOODY'S CORP is extremely liquid. Currently, the Quick Ratio is 2.50 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 81.15% 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 FY16 Q2 FY15
Net Sales ($mil)928.9918.1
EBITDA ($mil)441.4447.2
EBIT ($mil)410.2419.3
Net Income ($mil)255.5261.7


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)2026.82047.5
Total Assets ($mil)5044.94999.5
Total Debt ($mil)3420.43106.1
Equity ($mil)-600.0-331.2


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin72.1373.43
EBITDA Margin47.5148.7
Operating Margin44.1645.67
Sales Turnover0.680.7
Return on Assets17.6218.86
Return on Equity0.00.0
Debt Q2 FY16 Q2 FY15
Current Ratio2.642.72
Debt/Capital1.211.12
Interest Expense35.430.7
Interest Coverage11.5913.66


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)192.25200.35
Div / share0.370.34
EPS1.31.28
Book value / share-3.12-1.65
Institutional Own % n/a n/a
Avg Daily Volume955928.01126325.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 21.71 for the Capital Markets industry and a value on par with the S&P 500 average of 24.84. 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 24.37 Peers 21.71   MCO 19.18 Peers 14.95

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

MCO is trading at a 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 21.29 Peers 19.53   MCO NM Peers 1.45

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 premium to its peers.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MCO NM Peers 5.35   MCO -1.11 Peers 4.85

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 6.06 Peers 4.47   MCO -0.91 Peers -0.95

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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