Moody's Corporation (MCO) Intrinsic Value & DCF Valuation
Financial - Data & Stock Exchanges · NYSE
Current Price
$452.32
Intrinsic Value
$529.61
+14.6% margin of safety
What Is Moody's Corporation's Intrinsic Value?
As of 2026-10-06, the base-case DCF model estimates the intrinsic value of Moody's Corporation (MCO) at $529.61 per share, compared with a market price of $452.32, a margin of safety of +14.6%. The base case assumes 9.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $434.45 to $638.35. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Moody's Corporation (MCO) Undervalued?
At $452.32, MCO trades about 14.6% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand and Reputation
Moody's brand is synonymous with credit ratings. This strong reputation fosters trust and credibility among investors and issuers globally.
↑Data and Analytics Scale
The company possesses a vast and proprietary dataset built over decades. This scale provides a significant advantage in generating insightful analytics.
↑Regulatory Recognition
Moody's ratings are often embedded in regulatory frameworks and investment mandates. This creates a sticky demand for its services.
INVESTMENT RISKS
↓Systemic Financial Crises
A severe global financial crisis could lead to widespread defaults and a reassessment of rating methodologies, impacting Moody's core business.
↓Technological Disruption
Advancements in AI and machine learning could automate aspects of credit analysis. This might reduce reliance on traditional rating agencies.
↓Geopolitical and Economic Volatility
Global economic downturns or geopolitical instability can affect debt issuance and investor confidence, indirectly impacting Moody's revenue.
Base case
MCO base case valuation
Intrinsic Value
$529.61
Margin of safety
+14.6%
Expected annual return
+3.2%
Base case assumptions: 9.1% annual growth, 10.0% discount rate, 22.92x exit multiple, 5 year projection. Data as of 2026-10-06.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MCO valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Moody's Corporation respond.
Open DCF Calculator for MCOCompany Overview
Moody's Corporation operates as a global leader in risk assessment, divided into two main segments: Moody's Investors Service and Moody's Analytics. Moody's Investors Service is dedicated to issuing credit ratings and providing detailed assessments for a diverse range of debt obligations and the entities that issue them. This encompasses corporate, financial institution, governmental, and structured finance securities across approximately 140 nations. These ratings are made publicly available through press releases, digital media, and real-time financial information systems. Its vast scope includes ratings for thousands of non-financial corporations, financial institutions, public finance issuers, sovereign and sub-sovereign governments, supranational bodies, infrastructure projects, and structured finance deals. The Moody's Analytics segment develops and provides a comprehensive suite of products and services designed to support the risk management needs of institutional participants in financial markets. This includes subscription-based research, data, and analytical tools such as credit ratings, quantitative credit scores, economic forecasts, business intelligence, commercial real estate data, and specialized training and certification programs. Additionally, this segment offers offshore analytical and research services, along with advanced software solutions for risk management. Originally founded in 1900 and headquartered in New York, New York, the company was known as Dun and Bradstreet Company before officially becoming Moody's Corporation in September 2000.
Financial Metrics — MCO Stock Valuation Data
Revenue/Share (TTM)
$46.50
FCF/Share (TTM)
$19.36
ROIC (TTM)
23.9%
ROE (TTM)
79.7%
P/FCF
23.1x
EV/EBITDA
21.0x
FCF Yield
4.36%
Debt/Equity
2.49x
On a trailing twelve-month basis, MCO generates free cash flow per share of $19.36 alongside a ROIC of 23.9%, both central inputs for a DCF valuation. Its P/FCF ratio of 23.1x and FCF yield of 4.36% then frame how MCO is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of MCO?
Moody's Corporation currently generates $19.36 in free cash flow per share. At the current price of $452.32, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is MCO undervalued?
MCO trades at a P/FCF ratio of 23.1x with a free cash flow yield of 4.36%. This P/FCF is in a moderate range. However, whether MCO is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value MCO stock using DCF?
To perform a DCF valuation on Moody's Corporation: (1) Start with the trailing free cash flow per share ($19.36) as the base, (2) project future FCF growth over 5-10 years based on Financial - Data & Stock Exchanges industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MCO's risk profile — with a debt-to-equity of 2.49x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to MCO?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Moody's Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Financial - Data & Stock Exchanges trends, then discounting those amounts to today's dollars. MCO's ROIC of 23.9% reflects how efficiently the company converts invested capital into profit.
How does WACC affect MCO stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MCO, with a debt-to-equity ratio of 2.49x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 21.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See MCO PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Financial Services valuationsDCF and P/E value MCO with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-06. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.