Moody's Corporation (MCO)
Quantitative Summary
DeterministicMoody's Corporation's P/E of 32.5 is above its sector average (19.2x), though accompanied by a 8.1% economic spread (ROIC − WACC). Financial health metrics are strong: Piotroski 8/9, Altman Z 6.9 (above 3.0 safe zone threshold). DCF fair value of $169 implies 62% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedMoody's Corporation demonstrates exceptional fundamental quality, underpinned by a robust ROIC-WACC spread of 8.1% that signals strong value creation relative to its cost of capital. The DuPont decomposition reveals an equity multiplier-driven return on equity of 58.5%, where high financial leverage amplifies returns generated from substantial net margins and moderate asset turnover. This operational strength is corroborated by a pristine Piotroski F-Score of 8/9, a highly resilient Altman Z-Score of 6.9 indicating low bankruptcy risk, and a negative Beneish M-Score of -2.49 that suggests minimal earnings manipulation concerns. While profitability factors remain robust with an RMW score of 0.107, the stock carries significant valuation pressure; trading at 32.3x forward earnings compared to a sector average of 18.4x implies the market is pricing in aggressive growth assumptions rather than current multiples.
A discounted cash flow analysis suggests a substantial discrepancy between implied worth and current pricing, with fair value estimated at $169 versus prevailing levels that reflect -61.2% downside potential based on this model's inputs. This wide gap appears driven by an assumed ten-year free cash flow growth rate of 28.4%, which may be overly optimistic given the high entry multiple and historical performance norms. The stock currently embeds expectations for sustained double-digit expansion that, if unmet, could precipitate a sharp re-rating. Consequently, while the underlying business economics are sound, the valuation premium leaves little margin for error regarding growth execution or macroeconomic headwinds affecting credit demand.
Risk-adjusted metrics present a mixed picture; although profitability characteristics remain strong, the stock exhibits negative momentum relative to size and value factors, evidenced by an annual Fama-French alpha of -13.81% and a neutral HML exposure. Furthermore, insider activity over the past 90 days shows net selling totaling $7.5 million, which may signal management caution regarding current price levels or future visibility despite strong fundamentals. Investors must weigh the durability of Moody's dominant market position against the steep valuation multiple and recent internal capital flows to determine if the risk-reward profile aligns with their specific return thresholds.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 9% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 10.9% | 12.9% | 14.9% |
|---|---|---|---|
| 2% | $199 | $156 | $126 |
| 3% | $221 | $169 | $135 |
| 4% | $249 | $185 | $145 |
Center = base case. Green = >10% upside, Red = >10% downside vs $453.60.
Pre-computed DCF: WACC=12.9%, terminal growth 3%. Fair value $169 (-61.6%). Not investment advice.
Valuation Context
Currently trading 49% below its 5-year average P/E of 61.0x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedMoody's Corporation currently trades at $427.41 within the financial services sector, presenting a technical snapshot where price action must be weighed against underlying risk dynamics rather than viewed in isolation. The specific level of $427.41 serves as an anchor point for analyzing recent volatility patterns and potential drawdowns that may have occurred or are imminent. Without additional data on moving averages, volume profiles, or macroeconomic triggers, the structural integrity of any observed momentum remains ambiguous; it could represent a robust trend supported by fundamental strength or a fragile accumulation susceptible to sudden correction if market sentiment shifts. The interplay between current valuation and historical volatility is critical for assessing whether recent price movements reflect genuine business performance improvements or temporary liquidity fluctuations. In financial services, high valuations often coincide with elevated sensitivity to interest rate changes and credit cycle nuances, meaning that even moderate drawdowns can signal broader sector stress rather than company-specific weakness. Observers should monitor how the stock reacts to fundamental backdrops such as regulatory shifts or economic data releases, as these factors frequently dictate whether technical setups hold or collapse under pressure. Ultimately, the technical picture for MCO at this juncture relies heavily on external confirmation of its risk profile. The absence of clear divergence indicators suggests that traders must exercise caution in interpreting short-term price swings as definitive signals. Whether the current trajectory represents a sustainable structural shift or a precarious plateau depends largely on how quickly volatility compresses and whether fundamental support levels can withstand potential downside
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-15 | $1.0300 | 0.0% |
| 2026-03-02 | $1.0300 | +9.6% |
| 2025-11-21 | $0.9400 | 0.0% |
| 2025-08-15 | $0.9400 | 0.0% |
| 2025-05-16 | $0.9400 | 0.0% |
| 2025-02-25 | $0.9400 | +10.6% |
| 2024-11-22 | $0.8500 | 0.0% |
| 2024-08-16 | $0.8500 | 0.0% |
| 2024-05-16 | $0.8500 | 0.0% |
| 2024-02-22 | $0.8500 | +10.4% |
| 2023-11-22 | $0.7700 | 0.0% |
| 2023-08-17 | $0.7700 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLF or VFH, the fund manager is mechanically forced to buy or sell MCO shares regardless of Moody's Corporation's individual fundamentals. We estimate $8.5B of passive capital is structurally linked to MCO through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Moody's Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If Moody's Corporation (MCO) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Apple Inc. (AAPL) as the most exposed collateral stock, sharing 2 ETFs with MCO. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 28 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
MCO Ownership Dynamics
Passive funds hold 1 in every 9 MCO shares, reducing daily market volatility.
Moody's Corporation (MCO) exerts measurable gravity on the passive index market, currently representing 0.9% of the State Street Financial Select Sector SPDR ETF (XLF) and 0.9% of the VFH (VFH). Across 28 tracked ETFs, approximately 20M shares (11.2% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest MCO Exposure
Float lock-up computed from 28 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
MCO Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Moody's Corporation over the past year sits near $484.38 (11% of 252-day volume). The current price of $453.60 sits 6.4% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
MCO Capital Efficiency
How efficiently does Moody's Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Moody's Corporation converts 66% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 8.1% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-08 | 1 | $457.10 | $457.1 |
| 2026-04-22 | 1,059 | $459.59 | $486,705.81 |
| 2026-04-15 | 3 | $438.06 | $1,314.18 |
| 2026-04-06 | 80,097 | $440.79 | $35.3M |
| 2026-03-25 | 15 | $428.46 | $6,426.9 |
| 2026-03-03 | 4,185 | $466.10 | $2.0M |
| 2026-02-18 | 79,411 | $423.22 | $33.6M |
| 2026-02-04 | 1,603 | $471.05 | $755,093.15 |
| 2026-01-30 | 238 | $515.45 | $122,677.1 |
| 2026-01-21 | 11,292 | $517.30 | $5.8M |
| 2025-12-01 | 105 | $490.78 | $51,531.9 |
| 2025-11-17 | 685 | $479.48 | $328,443.8 |
| 2025-11-14 | 732 | $490.77 | $359,243.64 |
| 2025-11-10 | 10,142 | $487.98 | $4.9M |
| 2025-11-03 | 70 | $480.30 | $33,621 |
| 2025-10-22 | 120 | $484.92 | $58,190.4 |
| 2025-10-20 | 39,900 | $471.04 | $18.8M |
| 2025-10-16 | 1,045 | $478.51 | $500,042.95 |
| 2025-10-14 | 20 | $473.72 | $9,474.4 |
| 2025-10-09 | 4,402 | $490.09 | $2.2M |
| 2025-10-08 | 5,023 | $488.43 | $2.5M |
| 2025-10-07 | 5,419 | $483.45 | $2.6M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| SPGI | 0.876 | 0.880 | High co-movement |
| NDAQ | 0.738 | 0.747 | High co-movement |
| MSCI | 0.672 | 0.701 | Moderate |
| ADP | 0.610 | 0.617 | Moderate |
| FDS | 0.600 | 0.591 | Moderate |
| PAYX | 0.545 | 0.531 | Moderate |
| ICE | 0.539 | 0.558 | Moderate |
| PYPL | 0.533 | 0.561 | Moderate |
| VRSK | 0.532 | 0.591 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare MCO to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.