Morningstar, Inc. (NASDAQ: MORN)

Sector: Financial Services Industry: Financial Data & Stock Exchanges CIK: 0001289419
Market Cap 7.22 Bn
P/B 10.81
P/E 90.98
P/S 9.96
ROIC (Qtr) 15.88
Div Yield % 0.72
Rev 1y % (Qtr) 8.48
Total Debt (Qtr) 1.26 Bn
Debt/Equity (Qtr) 1.03
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About

Morningstar, Inc., a leading global provider of independent investment insights, is on a mission to empower investor success. Established in 1984, the company has grown its footprint in worldwide markets, offering a variety of products and solutions for both individual and institutional investors. Morningstar's business pillars include supporting individuals, financial advisors, wealth managers, and institutions that make their own investment decisions; providing investment management services, advisor tools, and platforms; and offering credit ratings...

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Investment thesis

Bull case

  • Strong operating cash flow of 589.70M provides robust 0.47x coverage of total debt 1.26B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 474.50M provide 11.35x coverage of short-term debt 41.80M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 589.70M provides strong 10.46x coverage of stock compensation 56.40M, indicating sustainable incentive practices.
  • Operating cash flow of 589.70M provides exceptional 20.62x coverage of interest expenses 28.60M, showing strong debt service capability.
  • Robust free cash flow of 442.60M exceeds capital expenditure of 147.10M by 3.01x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 589.70M barely covers its investment activities of (139.30M), with a coverage ratio of -4.23, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 589.70M provides thin coverage of dividend payments of (76.90M) with a -7.67 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 474.50M provide limited coverage of acquisition spending of (20.40M), which is -23.26x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 589.70M provides insufficient coverage of deferred revenue obligations of 607.10M, which is 0.97x, raising concerns about future service delivery capabilities.
  • Operating earnings of 524.30M show weak coverage of depreciation charges of 189.90M, with a 2.76 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Financial Data & Stock Exchanges
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SPGI S&P Global Inc. 125.09 Bn 27.98 8.16 13.58 Bn
2 CME Cme Group Inc. 102.51 Bn 68.45 28.03 152.46 Bn
3 ICE Intercontinental Exchange, Inc. 87.85 Bn 26.50 6.95 20.28 Bn
4 MCO Moodys Corp /De/ 80.83 Bn 188.94 21.48 7.36 Bn
5 NDAQ Nasdaq, Inc. 45.98 Bn 25.72 5.57 9.47 Bn
6 COIN Coinbase Global, Inc. 43.14 Bn 34.23 6.01 7.66 Bn
7 MSCI MSCI Inc. 39.87 Bn 33.16 12.72 6.31 Bn
8 CBOE Cboe Global Markets, Inc. 29.80 Bn 30.46 6.45 1.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.95 2.33
EV to Cash from Ops. EV/CFO 41.70 58.18
EV to Debt EV to Debt 5.56 16.65
EV to EBIT EV/EBIT 62.60 26.06
EV to EBITDA EV/EBITDA 47.04 28.31
EV to Free Cash Flow [EV/FCF] EV/FCF 57.16 -42.51
EV to Market Cap EV to Market Cap 0.97 1.22
EV to Revenue EV/Rev 9.68 21.49
Price to Book Value [P/B] P/B 10.81 -2.91
Price to Earnings [P/E] P/E 90.98 40.52
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.87 2.14
Dividend Payout Ratio % Div Payout % (Qtr) 20.40 32.20
Dividend per Basic Share Div per Share (Qtr) 1.87 2.66
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 17.66 26.87
Interest Coverage Int. cover (Qtr) 18.33 6.35
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.08 -9.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -5.61 19.34
Dividend Growth (1y) % Div 1y % (Qtr) 11.68 1.10
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.89 -0.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.12 7.35
EBIT Growth (1y) % EBIT 1y % (Qtr) 2.48 3.52
EBT Growth (1y) % EBT 1y % (Qtr) 4.60 6.34
EPS Growth (1y) % EPS 1y % (Qtr) 3.36 19.26
FCF Growth (1y) % FCF 1y % (Qtr) -1.40 32.90
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.21 11.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.61
Cash Payout Ratio Cash Payout (Qtr) 0.10 0.24
Cash Ratio Cash Ratio (Qtr) 0.45 0.52
Current Ratio Curr Ratio (Qtr) 0.99 1.97
Debt to Equity Ratio Debt/Equity (Qtr) 1.03 0.63
Interest Cover Ratio Int Coverage (Qtr) 18.33 6.35
Times Interest Earned Times Interest Earned (Qtr) 18.33 6.35
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.20 -986.89
EBIT Margin % EBIT Margin % (Qtr) 21.44 -993.67
EBT Margin % EBT Margin % (Qtr) 20.27 -1,072.83
Gross Margin % Gross Margin % (Qtr) 61.00 72.77
Net Profit Margin % Net Margin % (Qtr) 15.30 -1,442.37