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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Moody'S Corporation (XNYS:MCO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MCO
Name:
MOODY'S CORPORATION (XNYS:MCO)
Sector:
411.00M
Industry:
Financial Data & Stock Exchanges
CEO:
Mr. Raymond McDaniel
Total Employees:
14,206
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -58.12% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MOODY'S CORPORATION(MCO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FINANCIAL DATA & STOCK EXCHANGES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
284.4
One Month Price Target:
$286.33
Six Month Price Target :
$295.98
Likely Price in One Year's Time:
Ticker:
$307.55
Likely Trading Range Today Under (Normal Volatility)
$283.45
Price Upper limit ($) :
$285.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$271.14
This week:
$254.75
This month :
$225.1
Other Primary facts
Market Cap:
52.83B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
183.50M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.57%
-13.73%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$345.91
$317.60
$222.89
$251.20
Medium risk (<10%) entry points
Buy Call
Sell Call
$308.38
Buy Put:
Sell Put:
$302.34
$260.34
$266.46
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MCO
Sharpe Ratio:
2.02%
Comparison:
MCO, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -25.31% lower than the industry
& is -11.43% lower than the market/S&P 500 average
Average Returns/Yield of
MCO
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.10%
Yearly returns:
18.99%
Comparison of returns:
Average annual returns/yield (last 3 years) is -30.21% below industry average
Classification:
MCO, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.88
Statistical test of Returns:
MCO has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.30%
Weekly Volatility:
5.14%
Monthly Volatility:
10.27%
Yearly Volatility:
35.59%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.87%
Volatility in last five trading days has been -62.07% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.66%
Weekly VaR:
-10.43%
Monthly VaR:
-20.85%
How Much Can the price of
MCO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-72.23%
This translates to price declining to:
$233.76
This translates to price declining to:
$78.98
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
MCO is a 47.16% riskier investment compared to the market/S&P 500 & is 26.07% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -1.38% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MCO
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.886
Expected beta in 3 year's time:
1.253
Unlevered (debt free) Beta:
0.341
Beta in relation to Nasdaq (XNAS):
0.953
Beta in relation to all global stocks::
0.961
Beta Comparison & Analysis
Beta of competitors/peers::
1.041
Beta is 16.42% higher than peers
Average Industry Beta:
0.802
Beta is 51.08% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
63.75%
Sustainable growth rate is 79.74% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.018
Alpha is -82.56% below industry average alpha yield
Alpha is 115% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MCO
Equity cost of capital:
0.114
Equity cost of capital is 32.46% above industry mean WACC
Unlevered (without debt) cost of capital:
3.23%
Before-tax cost of debt:
2.65%
After-tax cost of debt:
2.10%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.10%
WACC is -9.64% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$33.46
Revenue growth rate per share of (3Y):
20.21
Annual revenue growth rate is 30.47% above the industry average
EPS:
$10.55
Expected Annual growth rate of EPS (3Y):
16.19%
Expected future EPS growth rate is 3.61% higher than the Financial Data & Stock Exchanges industry
Free cash flow (FCF) per share:
$8.63
Balance sheet equity growth per share: 41.14%
Equity growth rate per share is 42.07% higher than the industry
Debt per share
$42.10
EBITDA per share
$16.34
Valuation Analysis Today of
MCO
P/E Ratio:
30.74
P/E Ratio of Competitors/Peers:
14.9
P/E ratio is 106.38% higher than main peers & is -1.17% lower than the industry
Stock price/value with industry average P/E ratio: $328.16
MCO is -13.33% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $48.27
Present value of the expected future dividends only: $34.66
P/S (Price to Sales ratio):
8.5
Price to sales ratio is -14.31% below the industry mean
P/B (Price to book value ratio):
20.21
Price to free cash flow: 32.95
Price to free cash flow ratio is 65.28% higher than the industry
Net income growth rate (3Y):
73.78%
Net income growth rate is 15.36% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.58%
Dividend yeild: 0.93%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.64
Expected next dividend best case: $0.75
Expected next dividend worst case: $0.65
Average dividend payment (long-term): $0.60
Average dividend increase/decrease (growth rate) % per period: 3.56%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 25/07/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 26/04/2022
Dividend History:
2022-05-19--$0.70
2021-11-22--$0.62
2021-05-19--$0.62
2022-02-24--$0.70
2021-08-19--$0.62
2021-02-24--$0.62
Dividend growth rate is -60.59% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
322.68%
Net debt to equity ratio:
274.94%
Debt to assets ratio:
52.41%
Net debt to assets ratio:
44.66%
Debt-to-asset ratio is -4.73% below industry average
Ability to repay debt:
Interest coverage ratio:
13.57
Interest coverage ratio is -54.82% less than industry average
Looking forward:
Debt growth rate:
14.84%
Annual debt growth is -47% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.812
Statistical significance of correlation:
MCO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.632
Stock price is 28.35% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.632
Correlation of price movement with Nasdaq (^IXIC):
-0.01
Covariance of price movement with the market:
-0.013
Kurtosis
11.904
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.171
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MCO
Gross Profit Margin Ratio:
292%
Operating Profit Margin Ratio:
43.11%
Operating profit margin is 23.66% higher than the industry
Net Profit Margin Ratio:
292%
Effective Tax Rate:
21.02%
Effective tax rate is -5.89% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
82.54%
Return on equity (ROE) is 62.17% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.41%
Return on assets (ROA) is 18.71% higher than the industry
Financial Leverage:
2.1x
Current Ratio:
1.36
Current ratio is -19.62% below industry average
Cash Conversion Cycle (days):
0.1
Cash conversion cycle is -99.46% below industry average
The remaining useful life of property plant & equipment is: 5.1 years
Stock based compensation to net income ratio:
2.33%
In-depth Efficiency Analysis
Revenue generated per employee:
432.2K
Each employee generates -49% less revenue than industry average revenue per employee
EBITDA generated per employee:
211.1K
Each employee generates -51% less EBITDA than industry average revenue per employee
Profit generated per employee:
139.1K
Each employee generates -48% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
28.9K
Each employee generates -83% less free cash flow than industry average revenue per employee
Assets/Capital per employee
751.6K
Each employee generates -83% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MCO
UBS
CAPITAL ONE FINANCIAL CORPORATION (XNYS:COF)
BANK OF MONTREAL (XNYS:BMO)
INTERCONTINENTAL EXCHANGE, INC. (XNYS:ICE)
ICICI BANK LIMITED (XNYS:IBN)
Aon plc (XNYS:AON)
Banco Santander SA (XNYS:SAN)
Mitsubishi UFJ Financial Group, Inc. (XNYS:MUFG)
WESTPAC BANKING CORPORATION (XNYS:WBK)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�42%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.66B
4.48B
-
-
1.56B
-
276.00M
1.83B
4.00M
221.00M
276.00M
3.00B
2.65B
1.98B
2.50B
526.00M
1.98B
Statement of Cash Flow
Date:
Period:
78.00M
Differed Income Tax :
30.00M
Stock Based Compensation :
46.00M
Change in Working Capital :
- 182000.00K
Accounts Receivables:
- 117000.00K
Other Working Capital:
290.00M
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
470.00M
Investments in PP&E:
-
Net Acquisitions:
- 83000.00K
Purchases of Investments:
- 46000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.75B
103.00M
1.85B
1.82B
-
385.00M
4.06B
808.00M
6.04B
2.42B
450.00M
347.00M
611.00M
10.68B
-
14.74B
42.00M
607.00M
141.00M
1.64B
698.00M
2.99B
7.73B
860.00M
9.17B
-
12.16B
3.00M
13.13B
- 471000.0K
- 10270000.00K
March 31, 2022 at 6:00:00 AM
3.50B
2.39B
14.55B
553.00M
8.33B
6.6B
27.00M
- 59000.00K
- 161000.00K
-
-
- 560000.00K
- 130000.00K
338.00M
- 352000.00K
- 18000.00K
- 61000.00K
1.75B
1.81B
470.00M
- 59000.00K
411.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MCO
2023
2024
2025
2026
2027
$332.08
$359.11
$388.35
$419.96
$454.15