One-glance verdict
Undervalued
$327.89 our estimate vs market $214.86
Wall Street consensus: $239.00 (-27.1% lower than our fair-value estimate)
34% below our estimate, below the bear case
Fundamentals snapshot
Morningstar, Inc.
MORN · NMS · Financial Services · Financial Data & Stock Exchanges
Current price
$214.86
52-week range
$141.49 - $226.29
Market cap
$8.06B
Balance sheet
Stretched
12.60x Strong cushion
Net debt $1.38B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 7.2% last year.
- Reward Returns 32.0% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
What this company does
Morningstar, Inc.
Morningstar is a financial information company that sells research, ratings, and data to help investors make smarter decisions. It primarily earns money from subscriptions to its powerful software platforms, creating a steady stream of recurring revenue (predictable income that is likely to continue) that investors often find attractive.
How the company got here
Morningstar was started in 1984 by Joe Mansueto from his Chicago apartment with an initial investment of $80,000. His idea was to provide everyday people with the same quality of investment research that financial professionals had. The company's name is inspired by a quote from the book Walden by Henry David Thoreau. A major turning point was its initial public offering (IPO), which is when a private company first sells shares of stock to the public, in 2005. Over the years, Morningstar has grown by acquiring other companies, including PitchBook, a data provider for the private markets, and DBRS, a credit rating agency.
What it actually does
Morningstar provides research and ratings on a wide variety of investments like stocks and mutual funds to help investors make informed decisions. Think of them as a trusted source for financial information, similar to how you might look up reviews for a restaurant or a car. They offer software and data platforms that are used by individual investors, financial advisors, and large financial institutions. The company's goal is to make investing less complex and more transparent for everyone.
PitchBook
PitchBook is a platform that provides data and research on private capital markets, which include investments in companies that are not publicly traded on a stock exchange. This is a significant part of Morningstar's business, and its customers are typically investment professionals involved in venture capital (funding for new companies) and private equity (investing in private companies). They pay for subscriptions to access PitchBook's extensive database to find and analyze investment opportunities. This segment is a major contributor to Morningstar's license-based revenue (income from selling software subscriptions).
Morningstar Data & Analytics
This segment provides investors with comprehensive data, research, and insights to help with investment decision-making. Its flagship product, Morningstar Direct, is a software platform used by professional investment managers to research and analyze investments and create portfolios. Customers, such as asset managers (companies that invest pooled funds from clients), pay licensing fees to access this vast amount of information and analytical tools. This is a core part of Morningstar's business and a large source of its revenue.
Morningstar Wealth
The Morningstar Wealth division offers investment products and tools for financial advisors and individual investors. It provides services like model portfolios (pre-built investment collections) and separately managed accounts, where they manage investments directly for clients. This part of the business primarily makes money through asset-based fees, which means they earn a percentage of the total assets they manage or advise on for their clients. This segment aims to connect Morningstar's investment expertise directly with the end investor, often through their financial advisor.
Morningstar Credit
This segment provides credit ratings, research, and data, primarily through its subsidiary, Morningstar DBRS. A credit rating is an assessment of the ability of a company or government to pay back its debt. Institutional investors, like pension funds or insurance companies, pay for these ratings and research to help them understand the risk associated with lending money to these entities. This business generates transaction-based revenue, meaning they get paid for each rating they issue.
Morningstar Retirement
Morningstar Retirement offers products and services designed to help people save for their retirement. This includes managed accounts, where they provide personalized investment advice and management for an individual's retirement savings plan, like a 401(k). They also provide services to the companies that offer these retirement plans. This segment's revenue is largely asset-based, meaning they earn fees based on the amount of retirement assets they help manage.
What management is betting on now
Morningstar's strategy is to become essential to how investors work by providing them with unique data and analytics. They are focused on innovating and expanding their products to meet the changing needs of investors around the world. A key area of focus is on private markets, as shown by their investment in PitchBook and the launch of new tools to analyze private credit (loans to private companies). They are also expanding their wealth management solutions to provide more direct support to financial advisors and their clients.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$112.80M
FY2025 Q1
$58.80M
FY2025 Q2
$62.40M
FY2025 Q3
$160.10M
FY2025 Q4
$161.30M
FY2026 Q1
$53.60M
FY2026 Q2
$122.50M
FY2026 Q3
$155.40M
Revenue
$672.10M
Net income
—
Diluted EPS
3.06
Operating cash flow
$190.70M
Free cash flow
$155.40M
Fetching…
Sources
Revenue
$663.20M
Net income
—
Diluted EPS
2.83
Operating cash flow
$155.70M
Free cash flow
$122.50M
Fetching…
Sources
Revenue
$644.80M
Net income
—
Diluted EPS
2.73
Operating cash flow
$91.50M
Free cash flow
$53.60M
Fetching…
Sources
Revenue
$641.10M
Net income
—
Diluted EPS
2.79
Operating cash flow
$204.00M
Free cash flow
$161.30M
Fetching…
Sources
Revenue
$617.40M
Net income
—
Diluted EPS
2.17
Operating cash flow
$195.70M
Free cash flow
$160.10M
Fetching…
Sources
Revenue
$605.10M
Net income
—
Diluted EPS
2.09
Operating cash flow
$99.00M
Free cash flow
$62.40M
Fetching…
Sources
Revenue
$581.90M
Net income
—
Diluted EPS
1.82
Operating cash flow
$91.00M
Free cash flow
$58.80M
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Sources
Revenue
$591.00M
Net income
—
Diluted EPS
2.72
Operating cash flow
$153.40M
Free cash flow
$112.80M
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Sources
Is it cheap or expensive?
Fair value $327.89 vs current price $214.86
Wall Street consensus is the average analyst price target: $239.00 (-27.1% lower than our fair-value estimate).
Our most-likely fair value is $327.89 a share — about 52.6% above today's price of $214.86, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.4B. Interest coverage 12.6x.
Net debt
$1.38B
Interest coverage
12.60x
Morningstar, Inc.'s profit covers its interest bill about 12.6 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
MORN
BASELINE
Morningstar, Inc.
Total debt $1.90B Interest coverage 12.60x This is the baseline the peer rows are being compared against.
Total debt $13.46B Interest coverage 21.52x +71% vs MORN Carries about 1.7x more debt cushion than MORN.
Total debt $7.62B Interest coverage 12.32x -2% vs MORN Has roughly the same debt cushion as MORN.
Total debt $6.89B Interest coverage 8.16x -35% vs MORN Carries about 1.5x less debt cushion than MORN.
Total debt $1.54B Interest coverage 12.80x +2% vs MORN Has roughly the same debt cushion as MORN.
Total debt $4.62B Interest coverage 7.86x -38% vs MORN Carries about 1.6x less debt cushion than MORN.
What you should know
The case for and against MORN
3 Rewards
0 Risks
Rewards
-
Revenue grew 7.2% last year.
-
Returns 32.0% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.44x
Forward P/E
15.35x
P/B
6.99x
P/S
3.14x
EV/EBITDA
13.88x
PEG ratio
2.31x
Profitability
How much profit each dollar creates
Gross margin
62.2%
Operating margin
24.2%
Net margin
16.4%
ROE
32.0%
ROA
9.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.86x
Current ratio
1.06x
Quick ratio
0.94x
Total debt
$1.90B
Total cash
$523.80M
Growth
How the business has been compounding
Revenue TTM
$2.62B
Revenue 5Y CAGR
9.5%
EPS TTM
10.51
EPS 5Y CAGR
75.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$641.90M
Free CF TTM
$442.60M
FCF margin
16.9%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
18.6%
Last ex-div date
2026-10-02