Assessing MSCI’s Valuation After Launching Its Private Credit Factor Model for Risk Transparency

MSCI (MSCI) just unveiled its Private Credit Factor Model, a new analytics tool aimed squarely at tackling some long-standing frustrations for institutional investors in the surging private credit market. As allocations to private credit continue to rise and the call for transparency grows louder, MSCI’s latest launch is positioned as a meaningful answer. The company’s new solution offers investors a way to break down risks, stress test exposures, and integrate private credit into total portfolio risk reporting. These steps help bring private assets up to par with their public counterparts in terms of risk assessment.

This announcement comes at an interesting time for MSCI shareholders. MSCI stock has managed a gain of over 4% in the past year, recovering from a dip earlier this year, while its five-year return stands out as especially strong. The fact that momentum has picked up again within the last month suggests that recent initiatives, including this product launch, are beginning to resonate with the market, even if the overall pace has been uneven. These launches also align with the broader trend as MSCI has seen its revenue and net income both notch steady annual growth, reflecting a push to create value through innovation.

After this latest move and with MSCI’s stock showing renewed momentum, is the market now correctly valuing its growth, or could there still be an opportunity before the next phase kicks in?

Most Popular Narrative: 7.2% Undervalued

According to the most widely followed narrative, MSCI is currently undervalued by 7.2% based on expectations for robust earnings and revenue growth in the coming years.

Substantial growth in asset-based fee revenue is being driven by surging global flows into ETFs and index-linked products, especially for non-U.S. and international exposures. This highlights persistent structural demand for MSCI's indices as capital allocators seek globally diversified portfolios, which directly boosts revenue and earnings.

What is the real engine powering this undervaluation call? The narrative hinges on a few bold financial projections, such as sustained growth rates, margin expansion, and a profit multiple that the rest of the industry cannot match. Curious about the conviction behind that price target? This valuation relies on numbers most investors would not expect. Find out exactly what growth drivers make this fair value possible.

Result: Fair Value of $619.07 (UNDERVALUED)

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

However, lower retention rates in key segments or intensifying competition could curb MSCI’s momentum and challenge optimistic growth assumptions in the coming years.

Find out about the key risks to this MSCI narrative.

Another View: Market Multiple Tells a Different Story

While analyst forecasts point to growth and an undervalued price, looking at the market's standard earnings ratio paints a less optimistic picture. By this method, MSCI actually looks more expensive than its sector. Which side is closer to the mark?

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

Stay updated when valuation signals shift by adding MSCI to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own MSCI Narrative

If you have a different perspective or want to dig into the details yourself, you can shape your own MSCI narrative in just a few minutes. Do it your way.

A great starting point for your MSCI research is our analysis highlighting 1 key reward and 1 important warning sign 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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