Moody’s (MCO): Evaluating Valuation After Strong H1 2025 Results and Private Credit Momentum

Moody's (MCO) shares are in focus after the company reported solid revenue and earnings growth for the first half of 2025. The performance was driven by strong demand in private credit markets as well as the CAPE Analytics acquisition.

See our latest analysis for Moody's.

Moody's recent earnings momentum has come with a share price that has been mostly steady this year, closing at $485.04. While the latest news of resilient growth and a highly visible recurring revenue base has kept sentiment neutral, investors looking further out will note the 6.1% total shareholder return over the past twelve months and a robust 102.7% total return over three years. This suggests resilience and long-term compounding for those willing to ride out short-term market uncertainty.

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With shares treading water despite impressive fundamentals and an optimistic outlook, investors are left to wonder whether the current price is a bargain for Moody's or if the market has already factored in the company’s next phase of growth.

Most Popular Narrative: 11.1% Undervalued

The narrative’s fair value estimate for Moody’s sits notably above the last close price, setting up a clear expectation gap for investors. With the current price trailing the projected upside, the assumptions powering this target demand a closer look.

Moody's is experiencing accelerating demand from the rapid evolution and expansion of private credit markets, evidenced by 75% year-over-year growth in private credit revenues, 25% of first-time mandates coming from private credit, and ongoing issuer/investor demand for independent risk assessment. This strongly supports future revenue growth and earnings resilience as private credit's share in global financing expands.

Read the complete narrative.

What’s behind this premium? The narrative’s hidden engine is a blend of record-breaking growth in new markets, surging adoption of emerging technology, and future profit assumptions usually reserved for market leaders. Want to know which bold numbers justify this big fair value? Click through and see what’s driving the optimism.

Result: Fair Value of $545.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened regulatory scrutiny of private credit and rising competition from AI-driven analytics could still challenge Moody's growth trajectory and margin expectations.

Find out about the key risks to this Moody's narrative.

Another View: Multiples Tell a Different Story

While the narrative points to undervaluation, Moody’s trades at a price-to-earnings ratio of 40.8x, which is much higher than both the US Capital Markets industry average of 27.1x and the peer average of 31x. This significant premium signals optimism, but it also adds valuation risk if growth slows or expectations are not met.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Moody's Narrative

Feel like seeing the numbers firsthand or forming your own view on Moody's? Dive into the data, shape your own perspective, and Do it your way

A great starting point for your Moody's research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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