| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 25 | 30.1x | 17.8x | Bottom tier | |
Growth | 70 | 11.7% | 7.1% | Top tier | |
Quality | 99 | — | — | Top tier | |
Safety | 26 | — | — | Bottom tier | |
Capital Return | 50 | 0.83% | 2.12% | Around median | |
Momentum | 53 | -5.8% | 2.9% | Around median | |
Sentiment | 64 | 15 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Moody's Corporation operates through two interconnected pillars: Moody's Investors Service, which generates revenue from credit ratings for debt and transactions and from credit monitoring, and Moody's Analytics, which sells data, research, models, and risk management, compliance, and insurance solutions. In Q2 FY2026, Moody's Investors Service rated more than $2 trillion of debt for the second consecutive quarter, while Moody's Analytics' annualized recurring revenue reached approximately $3.7 billion, and retention for the twelve months ended in that quarter reached 95%.
In Q2 FY2026, revenue was $2.2 billion, gross profit was $1.7 billion, net income was $878 million, and GAAP diluted earnings per share was $5.03. These figures equate to a gross profit margin of approximately 77% and a net income margin of approximately 40%, while management reported that revenue grew 15%, adjusted operating income grew 25%, and adjusted diluted earnings per share increased 31% to $4.68.
Performance was driven by both businesses, but Moody's Investors Service delivered the stronger operating leverage: ratings revenue rose 25%, transaction revenue increased 34%, and the adjusted operating margin reached 68.3%, up 410 basis points. Moody's Analytics' reported revenue grew 4%, or 8% organically and at constant currency, and recurring revenue accounted for 99% of its revenue, with an adjusted operating margin of 33.6%, up 150 basis points.
The analysts' average price target is $540.6, within a wide range of $500 to $597, with a consensus rating of “Buy.” The average is approximately 1% below the 52-week range high of $546.88, while the highest target exceeds that high and the lowest target remains above the range low of $402.28; the provided data does not include a reliable price-to-earnings ratio that would permit an earnings-based comparison.
Figures in the text are as of 2026-08-26; the live price is shown at the top of the page.
Revenue was $2.2 billion, gross profit was $1.7 billion, and net income was $878 million in Q2 FY2026. GAAP earnings per share was $5.03, while adjusted diluted earnings per share was $4.68, up 31%. Management stated that revenue grew 15% and adjusted operating income grew 25%, with the adjusted operating margin increasing 440 basis points to 55.3%.
Rated issuance exceeded $2 trillion for the second consecutive quarter in Q2 FY2026, up 33% year over year. Drivers included artificial intelligence, data center financing, private credit, and infrastructure, and nearly 20% of issuance exceeding $5 billion was related to artificial intelligence and its infrastructure. Accordingly, Moody's raised its FY2026 issuance growth forecast to mid-single-digit growth, while maintaining its business revenue growth forecast at high-single-digit growth because of the lower-yielding transaction mix.
The company benefits from artificial intelligence in two ways: rating the debt needed to finance infrastructure and distributing its data within customer platforms. On August 25, 2026, Moody's ratings and research were integrated into Google Cloud's Gemini Enterprise for financial services, and it also had more than 100 MCP connections and intelligent APIs in use or in pilot in Q2 FY2026. Conversely, the call discussed the possibility of competition changing as model costs decline, and the company's response relies on data covering more than 630 million entities and on explainable, auditable outputs.
Automated analysis for informational purposes only — not investment advice.
Moody's Analytics' annualized recurring revenue reached approximately $3.7 billion in Q2 FY2026, growing by approximately 9%, with retention of 95% for the twelve months ended in that quarter. Recurring revenue accounted for 99% of the business's revenue, while transaction revenue fell 72% to approximately $10 million due to portfolio reshaping. Annualized recurring revenue grew 13% in KYC, 10% in banking, and 9% in insurance, and management expects high-single-digit growth for FY2026.
Geopolitical risks or disruptions to energy flows could lead to risk-off periods and delayed mergers or financing, pressuring ratings volumes. Some issuance activity also shifted into Q2 FY2026, and management expects low-single-digit Moody's Investors Service revenue growth in Q3, followed by roughly flat year-over-year revenue in Q4. In addition, a larger share of growth is coming from repeat issuers, data centers, and financial institutions, which are transactions with lower average yields than some insurance, CLO, and CMBS transactions.
Free cash flow reached $688 million in Q2 FY2026, up 47% year over year. The company executed approximately $2.2 billion of share repurchases since the beginning of FY2026 and raised the annual program ceiling to $3 billion. Management expects free cash flow of between $2.7 billion and $2.9 billion for FY2026, and intends to return more than 130% of free cash flow to shareholders, supported by proceeds from portfolio actions.
