Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 3.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.9 |
| PEG | 4.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 25.5x
- ▸PEG: 1.66
MCO · Why this verdict
Why Moody's (MCO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Moody's is a genuinely high-quality franchise — operating margins of 32%, ROE of 71%, and a Piotroski F-Score of 7 out of 9 — and has delivered four consecutive earnings beats averaging about 5% above consensus; the stock nonetheless sits in a confirmed downtrend with the moving average declining 1.9% per month, leverage at a debt-to-equity ratio of 2.4 introduces meaningful balance-sheet risk, and the risk/reward of 1.24-to-1 does not yet reach the asymmetry threshold despite 6.2% upside to the analyst consensus target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Operating margins of 32%, ROE of 71%, and a Piotroski F-Score of 7 out of 9 position this as a high-quality franchise — a foundation that typically supports resilient earnings through economic cycles, even if near-term technical headwinds are compressing the multiple. Quality breakdown | Net margins remain above 25% and gross margins stay above 60% for 4 consecutive quarters, confirming the quality of the business is durable. | ↓Deteriorating |
| CounterROE of 71% is materially amplified by the debt-to-equity ratio of 2.4; a deleveraging event or a rise in the cost of debt could compress returns significantly, making the franchise appear more defensible than the capital structure currently supports. | ||
Four consecutive earnings beats averaging roughly 5% above consensus — ranging from 2.6% to 6.4% — demonstrate consistent management discipline and an approach to guidance that leaves room to exceed expectations each quarter. Earnings | Beat streak extends to 6 consecutive quarters over the next 12 months, with average positive surprise remaining above 3%. | ↓Deteriorating |
| CounterThe beats are all in the 2–6% range, which is narrow enough that a single-quarter cost pressure or a modest volume deceleration could break the pattern without signaling any structural change in the business. | ||
The stock is trading below its 200-day moving average with the moving average itself declining at roughly 1.9% per month — a confirmed downtrend — which typically indicates that institutional selling pressure is in control of near-term price action. Momentum breakdown | Price reclaims the 200-day moving average and the 30-day slope of that average turns positive, sustaining for 4 consecutive weeks. | ↓Deteriorating |
| CounterOn-balance volume is rising, indicating that accumulation is occurring below the surface; if buyers continue absorbing supply at current levels, the price could reverse the downtrend without further deterioration in the underlying business. | ||
A debt-to-equity ratio of 2.4 introduces a meaningful leverage penalty: if interest rates rise or cash generation softens, the balance sheet has less cushion to absorb pressure, and the same lever that amplifies ROE can work sharply in reverse. Bear case | Debt-to-equity falls below 1.5 within 8 quarters, indicating material debt reduction from operating cash flow. | →Stable |
| CounterIf free cash flow coverage of debt service remains robust and the dividend payout at 91% is sustainable on a cash basis, the leverage may be stable and manageable rather than a growing liability. | ||
Operating margins of 32%, ROE of 71%, and a Piotroski F-Score of 7 out of 9 position this as a high-quality franchise — a foundation that typically supports resilient earnings through economic cycles, even if near-term technical headwinds are compressing the multiple.
↓DeterioratingQuality breakdown
- Expectation
- Net margins remain above 25% and gross margins stay above 60% for 4 consecutive quarters, confirming the quality of the business is durable.
CounterROE of 71% is materially amplified by the debt-to-equity ratio of 2.4; a deleveraging event or a rise in the cost of debt could compress returns significantly, making the franchise appear more defensible than the capital structure currently supports.
Four consecutive earnings beats averaging roughly 5% above consensus — ranging from 2.6% to 6.4% — demonstrate consistent management discipline and an approach to guidance that leaves room to exceed expectations each quarter.
↓DeterioratingEarnings
- Expectation
- Beat streak extends to 6 consecutive quarters over the next 12 months, with average positive surprise remaining above 3%.
CounterThe beats are all in the 2–6% range, which is narrow enough that a single-quarter cost pressure or a modest volume deceleration could break the pattern without signaling any structural change in the business.
The stock is trading below its 200-day moving average with the moving average itself declining at roughly 1.9% per month — a confirmed downtrend — which typically indicates that institutional selling pressure is in control of near-term price action.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average and the 30-day slope of that average turns positive, sustaining for 4 consecutive weeks.
CounterOn-balance volume is rising, indicating that accumulation is occurring below the surface; if buyers continue absorbing supply at current levels, the price could reverse the downtrend without further deterioration in the underlying business.
A debt-to-equity ratio of 2.4 introduces a meaningful leverage penalty: if interest rates rise or cash generation softens, the balance sheet has less cushion to absorb pressure, and the same lever that amplifies ROE can work sharply in reverse.
→StableBear case
- Expectation
- Debt-to-equity falls below 1.5 within 8 quarters, indicating material debt reduction from operating cash flow.
CounterIf free cash flow coverage of debt service remains robust and the dividend payout at 91% is sustainable on a cash basis, the leverage may be stable and manageable rather than a growing liability.
Per-dimension breakdown
Quality
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.9 |
| FCF quality | 6.4 |
| Moat | 6.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 77%
- ▸Strong margins: 35%
- ▸Strong Piotroski F-Score: 7/9
- ▸High-quality business
Growth
4.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.7 |
| EPS growth | 5.6 |
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 4.5 |
| MA position | 6.0 |
| Volume | 1.5 |
- ▸Above 200-MA but MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 7.5 |
| Price target | 7.2 |
Insider
4.7/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.4 |
- ▸Negligible insider selling — $1,866,706 (0.002% of mkt cap)
Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.1 |
| quality rank | 7.0 |
| growth rank | 2.5 |
- ▸Superior ROE vs peers
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 3.0 |
| 52w position | 7.6 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.0 |
| days to cover | 7.1 |
| volatility | 5.4 |
| put call | 8.4 |
| implied vol | 7.0 |
| max pain risk | 7.0 |
| beta | 5.6 |
| debt equity | 2.8 |
| news risk | 6.0 |
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
| dividend safety | 8.0 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (6)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:111d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (2)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.50
Upside
+4.1%
Downside
8.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.35>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot) reinforce the read. Current asymmetry R:R is 0.50 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 8.1, Sentiment at 6.9, and Risk (lower is worse) at 6.5; the weakest are Peer rank at 2.9, Value at 4.0, and Growth at 4.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Franchise Margins
Trip ifNet margin falls below 20% for 2 consecutive quarters, signaling meaningful margin compression.
- P2Four Quarter Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Confirmed Downtrend Technical Pressure
Trip ifThe 200-day moving-average slope rises above 0% and price holds above the 200-day moving average for 4 consecutive weeks.
- P4Leverage Penalty Debt Equity
Trip ifDebt-to-equity ratio falls below 1.5 within 8 quarters.