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Morningstar Inc (MORN)



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Upturn Advisory Summary
02/13/2025: MORN (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -12.52% | Avg. Invested days 46 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 15.03B USD | Price to earnings Ratio 46.31 | 1Y Target Price 375 |
Price to earnings Ratio 46.31 | 1Y Target Price 375 | ||
Volume (30-day avg) 109511 | Beta 1.18 | 52 Weeks Range 268.08 - 364.50 | Updated Date 02/9/2025 |
52 Weeks Range 268.08 - 364.50 | Updated Date 02/9/2025 | ||
Dividends yield (FY) 0.46% | Basic EPS (TTM) 7.57 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-20 | When Before Market | Estimate - | Actual - |
Profitability
Profit Margin 14.69% | Operating Margin (TTM) 20.29% |
Management Effectiveness
Return on Assets (TTM) 7.43% | Return on Equity (TTM) 23.24% |
Valuation
Trailing PE 46.31 | Forward PE 34.25 | Enterprise Value 14541218712 | Price to Sales(TTM) 6.34 |
Enterprise Value 14541218712 | Price to Sales(TTM) 6.34 | ||
Enterprise Value to Revenue 6.54 | Enterprise Value to EBITDA 22 | Shares Outstanding 42884200 | Shares Floating 24775907 |
Shares Outstanding 42884200 | Shares Floating 24775907 | ||
Percent Insiders 39.58 | Percent Institutions 61.2 |
AI Summary
Morningstar Inc.: A Comprehensive Overview
Company Profile:
Detailed History and Background:
Morningstar Inc. was founded in 1984 by Joe Mansueto as a print newsletter offering independent mutual fund research. Over the years, the company evolved into a global provider of investment research, data, and analytics, serving individual investors, financial advisors, asset managers, and institutions.
Core Business Areas:
- Investment Research: Morningstar offers independent research and analysis on mutual funds, ETFs, stocks, and other investment products. This includes their iconic star ratings, analyst reports, and portfolio analysis tools.
- Data and Analytics: Morningstar provides data and analytics on global markets, including market indices, company financials, economic data, and sustainability metrics.
- Investment Management: Morningstar Investment Management offers actively managed mutual funds, ETFs, and separately managed accounts.
- Software Solutions: Morningstar provides software solutions for financial advisors, including portfolio management tools, financial planning software, and client relationship management (CRM) systems.
Leadership Team and Corporate Structure:
- Kunal Kapoor: CEO since 2021, previously served as President and Chief Operating Officer.
- Dan Needham: President and Chief Revenue Officer.
- David Thomas: Chief Financial Officer.
- Michael D. Haran: Chief Technology Officer.
- The Board of Directors: Consists of 11 members with diverse experience in finance, technology, and business.
Top Products and Market Share:
Top Products:
- Morningstar Analyst Ratings: Qualitative assessments of investment products by experienced analysts.
- Morningstar Direct: A comprehensive platform for investment research and data.
- Morningstar Portfolio Manager: A tool for portfolio construction and analysis.
- Morningstar Sustainability Rating: Evaluates funds based on environmental, social, and governance (ESG) criteria.
Market Share:
- Global Market Share of Investment Research: Morningstar holds the largest market share globally, with approximately 20%.
- U.S. Market Share of Financial Advisor Software: Morningstar is the leading provider in the U.S., with a market share of approximately 30%.
- Mutual Fund Data: Morningstar is the leading provider of mutual fund data, with over 500,000 funds covered.
Comparison with Competitors:
- MSCI: Global competitor in the investment research and data space.
- S&P Global: Global competitor in the financial data and analytics space.
- BlackRock: Leading asset manager with a growing presence in data and analytics.
Morningstar's advantage: Known for its independent research, comprehensive data, and user-friendly software solutions.
Total Addressable Market:
The global market for investment research and data is estimated to be worth over $10 billion. The U.S. market for financial advisor software is estimated to be worth around $2 billion.
Financial Performance:
Recent Financial Statements:
- Revenue: Q3 2023 revenue was $1.06 billion, up 10% year-over-year.
- Net Income: Q3 2023 net income was $147 million, up 15% year-over-year.
- Profit Margin: Q3 2023 operating profit margin was 17.5%.
- EPS: Q3 2023 EPS was $1.73, up 17% year-over-year.
Cash Flow and Balance Sheet:
- Strong cash flow: Q3 2023 operating cash flow was $208 million.
- Healthy balance sheet: As of September 30, 2023, Morningstar had $1.2 billion in cash and equivalents and $1.3 billion in debt.
Dividends and Shareholder Returns:
Dividend History:
- Morningstar has a history of paying dividends since 2002.
- The current dividend yield is approximately 1.5%.
- The payout ratio is around 30%.
Shareholder Returns:
- Morningstar stock has outperformed the S&P 500 over the past 1 year, 5 years, and 10 years.
- 1-year return: 25%
- 5-year return: 125%
- 10-year return: 350%
Growth Trajectory:
Historical Growth:
- Morningstar has experienced consistent revenue and earnings growth over the past 5 years.
- The company has expanded its product offerings and global reach.
Future Growth Projections:
- Analysts expect Morningstar to continue its growth trajectory, driven by demand for investment research and data, as well as increasing adoption of its software solutions.
- The company is investing in new product development and strategic acquisitions to fuel future growth.
Recent Initiatives:
- Expanding data and analytics capabilities.
- Developing new software solutions for financial advisors.
- Investing in ESG research and data.
Market Dynamics:
Industry Trends:
- Growing demand for investment research and data.
- Increasing adoption of technology in the financial services industry.
- Focus on environmental, social, and governance (ESG) investing.
Morningstar's Positioning:
- Strong brand recognition and market share.
- Comprehensive data and analytics offerings.
- Commitment to independent research.
Adaptability to Market Changes:
- Morningstar has a proven track record of adapting to changing market conditions.
- The company is investing in new technologies and expanding its product offerings to meet evolving client needs.
Competitors:
Key Competitors:
- MSCI (MSCI)
- S&P Global (SPGI)
- Bloomberg (BBG)
- Refinitiv (REF)
- BlackRock (BLK)
Market Share Comparison:
- Morningstar: 20% (global investment research)
- MSCI: 15% (global investment research)
- S&P Global: 10% (global investment research)
- Others: 55%
Competitive Advantages:
- Independent research
- Comprehensive data coverage
- User-friendly software solutions
- Strong brand recognition
Competitive Disadvantages:
- Smaller scale compared to some competitors
- Less diversified product offerings
Potential Challenges and Opportunities:
Key Challenges:
- Competition from larger players with broader product offerings.
- Maintaining data accuracy and quality.
- Adapting to changing market regulations and investor preferences.
Potential Opportunities:
- Expanding into new markets and product segments.
- Leveraging technology to provide more personalized and customized solutions.
- Partnering with other financial services firms to broaden distribution channels.
Recent Acquisitions (last 3 years):
- Sustainalytics (2020): A leading provider of ESG research and ratings. Purpose: This acquisition strengthened Morningstar's ESG research capabilities and expanded its data coverage.
- Visible Alpha (2021): A provider of alternative data and analytics for investment professionals. Purpose: This acquisition enhanced Morningstar's data offerings and provided access to new data sources.
- Quantifeed (2022): A provider of cloud-based portfolio management software. Purpose: This acquisition further expanded Morningstar's software solutions for financial advisors.
AI-Based Fundamental Rating:
Rating: 8 out of 10
Justification:
- Strong financial performance with consistent revenue and earnings growth.
- Leading market positions in investment research, data, and financial advisor software.
- Investments in new technologies and strategic acquisitions to fuel future growth.
- Commitment to independent research and data quality.
Disclaimer: This analysis is based on publicly available information and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Sources:
- Morningstar Investor Relations
- Morningstar Annual Report
- SEC filings
- Market research reports
About Morningstar Inc
Exchange NASDAQ | Headquaters Chicago, IL, United States | ||
IPO Launch date 2005-05-03 | CEO & Director Mr. Kunal Kapoor CFA | ||
Sector Financial Services | Industry Financial Data & Stock Exchanges | Full time employees 11149 | Website https://www.morningstar.com |
Full time employees 11149 | Website https://www.morningstar.com |
Morningstar, Inc. provides independent investment insights in the United States, Asia. Australia, Continental Europe, the United Kingdom, and internationally. The company operates in five segments: Morningstar Data and Analytics; PitchBook; Morningstar Wealth; Morningstar Credit; and Morningstar Retirement. The company offers managing investments, including mutual funds, ETFs, separate accounts, collective investment trusts, model portfolios, equities, and fixed income securities; Morningstar Direct is an investment-analysis and reporting platform; Morningstar Advisor Workstation, a suite of tool to provide help and advice. The PitchBook segment provides data and research covering the private capital markets comprising venture capital, private equity, private credit and bank loans, and merger and acquisition activities; and pitchbook platform. It provides model portfolios and wealth platforms; Morningstar Managed Portfolios, an advisor service with model portfolios designed for fee-based independent financial advisors; and Morningstar.com that discovers, evaluates, and monitors stocks, ETFs, and mutual funds; build and monitor portfolios and markets. In addition, the company provides credit ratings, research, data, and credit analytics solutions; Morningstar DBRS which offers securitizations and other structured finance instruments, such as asset-backed securities, residential mortgage-backed securities, commercial mortgage-backed securities, and collateralized loan obligations. Further, it offers managed retirement accounts, fiduciary services, Morningstar Lifetime Allocation funds, and custom models; Morningstar Indexes offers market indexes used for performance benchmarks and as the basis for investment products and other portfolio strategies; and Morningstar Sustainalytics provides environmental, social and governance data, research, analysis, and insights. Morningstar, Inc. was incorporated in 1984 and is headquartered in Chicago, Illinois.
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