Asset Structure Analysis
Moody’s Corporation ‘s total assets were $14.6 billion in fiscal 2023.
The size of goodwill and intangible assets was very huge. Goodwill was $6 billion and intangible assets amounted $2 billion.
Total current assets were $4.34 billion, in which, cash and cash equivalents were $2.13 billion and accounts receivable were $1.66 billion.
Liquidity and Solvency Analysis
Total current liabilities in 2023 were $2.5 billion, which is lower than the amount of total current assets, and cash and cash equivalents ($2.13 billion) were slightly less than the amount of total current liabilities, so that Moody’s Corporation ‘s liquidity is sufficient.
Total liabilities in 2023 were $11.15 billion, in which long-term liabilities were $7 billion. Considering net operating cash was $2.12 billion in fiscal 2023, so that Moody’s Corporation’s debt pressure is not huge.
Profitability Analysis
Moody’s Corporation’s revenues were $5.9 billion, $5.47 billion and $6.2 billion in fiscal 2023, 2022 and 2021, respectively.
Revenues were fluctuating, but its profit margin was relatively high.
The amount of $1.6 billion, $1.37 billion and $2.2 billion in fiscal 2023, 2022 and 2021, respectively.
Moody’s Corporation’s net profit margin was 27.1%, 25% and 35.5% in fiscal 2023, 2022 and 2021, respectively.
Cash Flow Analysis
Net cash provided by operating activities was $2.15 billion, $1.47 and $2 billion for 2023, 2022 and 2021, respectively.
Stock-based compensation was $190 million, $170 million and $175 million for 202, 2022 and 2021, respectively.
Stock-based compensation will be setoff by the amount of repurchasing stock. Therefore, The larger the amount of stock compensation, the lower the valuation of the company.
As we can see, Moody’s Corporation returned capital to shareholders in repurchasing stock and paying dividends, while also considering the impact of stock compensation and capital expenditures on the company’s valuation.
Moody’s Corporation’s operating performance for Q1 2024
Moody’s Corporation’s revenues were $1.79 billion and $1.47 billion in Q1 2024 and Q1 2023, respectively.
The revenues in Q1 2024 were up 21.8% year on year.
Conclusion
Now, Moody’s Corporation stock price is $445.99 per share, which is equivalent to $81.44 billion.
We reckon that Moody’s Corporation’s reasonable valuation was about $30 billion and we think Moody’s Corporation stock price is seriously overvalued.
Disclaimer: The content is for reference only and does not constitute investment advice.
Company Introduction
Moody’s is a global comprehensive risk assessment company that helps organizations predict, adapt, and develop in the new era of exponential risk growth. Moody’s report is divided into two parts: MA and MIS.
MA is a global provider in the following areas: i) research and insights; Ii) Data and information; And iii) decision-making solutions to help companies make better and faster decisions. MA leverages its industry expertise in various risk areas such as credit, markets, financial crime, supply chain, disasters, and climate to provide comprehensive risk assessment solutions, enabling business leaders to identify, measure, and manage the impact of interrelated risks and opportunities.
MIS issues credit ratings and provides evaluation services for various debts, plans, and facilities, as well as entities issuing such debts in the global market, including various corporate, financial institution, and government debts, as well as structured financing securities.