COMPILED BY GEMINI 3.1

Moody's (MCO) Intrinsic Value

An independent two-stage DCF analysis by a frontier AI model.

Fair Value Estimate

$7,718.00 per share
Current Price $438.67
Margin of Safety 1659.4%
UNDERVALUED

My Assumptions & Rationale

FCF Growth Rate (Y1-Y5)
8.4%

"> Derived directly from the Compound Annual Growth Rate (CAGR) of Moody's historical financials over the last 5 years. This assumes the company can maintain its historical growth trajectory for the next 5 years.

Discount Rate (WACC)
9.7%

"> Derived directly from the Compound Annual Growth Rate (CAGR) of Moody's historical financials over the last 5 years. This assumes the company can maintain its historical growth trajectory for the next 5 years.

Terminal Growth Rate
3.3%

"> The long-term growth rate applied after year 5. Derived as a percentage of the 10Y Treasury yield to approximate long-term nominal GDP growth, capped at 3.5% to ensure it does not exceed economic growth.

Sensitivity Analysis

Intrinsic value per share under varying discount rate and terminal growth rate assumptions.

WACC ↓ / Terminal → 2.3%2.8%3.3%3.8%4.3%
2.3% $9,147.26 $7,718.00 $6,675.03 $5,880.38 $5,254.81
2.8% $10,080.65 $8,372.07 $7,158.72 $6,252.56 $5,550.02
3.3% $11,226.18 $9,147.26 $7,718.00 $6,675.03 $5,880.38
3.8% $12,665.44 $10,080.65 $8,372.07 $7,158.72 $6,252.56
4.3% $14,528.00 $11,226.18 $9,147.26 $7,718.00 $6,675.03

Undervalued vs current price Overvalued vs current price

Key Risks

Macroeconomic Sensitivity

Moody's ratings issuance is highly correlated with global debt issuance volume, which fluctuates based on interest rates and macroeconomic stability.

Regulatory Environment

Credit rating agencies are heavily regulated. Changes in regulations or legal liabilities could negatively impact margins and cash flow.

Competition

Although forming a near-duopoly with S&P Global, competition for data, analytics, and non-rating services is intense.

Interest Rates

A prolonged high-interest-rate environment could suppress corporate debt issuance over an extended period, slowing growth.

Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.