Moody's trades at $508.76 and has moved in lockstep with the market. Its shares have returned 12.2% over the last six months while the S&P 500 has gained 16.5%.
Is now the time to buy MCO? Find out in our full research report, it’s free.
Why Are We Positive On MCO?
Founded in 1900 during America's railroad boom when investors needed reliable information on bond risks, Moody's (NYSE:MCO) provides credit ratings, risk assessment tools, and analytical solutions that help organizations evaluate financial risks and make informed investment decisions.
1. Skyrocketing Revenue Shows Strong Momentum
Long-term growth is the most important, but within financials, a stretched historical view may miss recent interest rate changes and market returns. Moody’s annualized revenue growth of 15% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
2. EPS Surges Higher Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Moody’s EPS grew at a spectacular 23% compounded annual growth rate over the last two years, higher than its 15% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, Moody's has averaged an ROE of 67%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Moody's has a strong competitive moat.
Final Judgment
These are just a few reasons why we're bullish on Moody's, but at $508.76 per share (or 34.8× forward P/E), is now the right time to buy the stock? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than Moody's
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