Morningstar, Inc. (MORN)
NEUTRALFundamental
74
Price
$215.82
Market Cap
$8.10B
Part 1 · What the company is worth
Overview
Morningstar researches and rates investments — mutual funds, ETFs, stocks and, through its PitchBook unit, private companies — and sells that research and the data behind it to the asset managers, financial advisors and investors who use it to decide where to put money. Its best-known product is the star rating that sums up a fund's past performance in a single symbol widely used across the industry. It also runs advisory and index businesses built on top of the same underlying data.
How it makes money
Most revenue comes from licenses: customers pay recurring fees to access Morningstar's data platforms, ratings and PitchBook's private-market database, so revenue tracks the number of subscribing institutions more than any single transaction. A smaller share is asset-based, earned as a percentage of money managed through Morningstar's model portfolios and managed accounts, which rises and falls with markets and with how much money advisors route through those products.
Revenue by segment
Data, research and analytics tools licensed to asset managers, redistributors and wealth managers for investment analysis and reporting.
Data and research on private capital markets — venture capital, private equity and M&A — sold as a subscription database to investors and dealmakers.
Credit ratings, research and analytics for fixed-income investors, competing with the established credit rating agencies on a smaller scale.
Model portfolios, managed accounts and technology platforms sold to financial advisors, plus the Morningstar Investor product for individuals.
Mainly Sustainalytics, an ESG ratings business, and Morningstar Indexes, reported outside the five main operating segments.
Managed-account and advice services built into employer retirement plans, the smallest of the five reportable segments.
Competitive moat
Patents and licences · NarrowThe star rating and decades of fund-performance history are difficult for a new entrant to replicate quickly, and PitchBook's private-market data has become a standard reference for dealmakers. But the moat is narrow rather than wide: large financial-data competitors such as Bloomberg and FactSet compete on adjacent turf, and customers can and do use more than one data provider at once.
What drives demand
Moderately cyclicalLicense-based data subscriptions are fairly sticky and renew year after year regardless of market direction, which cushions revenue in a downturn. The asset-based portion of revenue, tied to money managed through Morningstar's own portfolios and accounts, does rise and fall with market values, so overall growth slows somewhat when markets fall even though the business is not classically cyclical.
Key risks
- Competition in financial data — Larger and better-resourced competitors offer overlapping data, analytics and ratings, and customers can switch providers or use several at once, limiting Morningstar's pricing power.
- Reliance on data licensing agreements — Much of the business depends on continued access to underlying market and fund data under licensing arrangements with data providers and asset managers; losing or renegotiating those on worse terms would raise costs or limit coverage.
- Market-linked, asset-based revenue — Fees tied to assets under management or advisement move with financial market levels, so a sustained market decline reduces this portion of revenue independent of how well the underlying business performs.
The case for
Buyers point to five growing segments, a brand recognized well beyond its core fund-rating business, and PitchBook and Credit growing faster than the legacy Direct Platform, as evidence the company is successfully diversifying its data franchise.
The case against
Sellers worry that the core ratings and data business faces slow structural growth and fee pressure as index investing displaces the actively managed funds Morningstar historically rated, and that newer segments still have to prove they can sustain their current growth rates at scale.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$2.57B
Trailing 12 months (through 6/30/2026)
Net Income
$422M
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$443M
Total Equity
$1.22B
Total Liabilities
$2.37B
Current Ratio
1.06
Interest Coverage
-
Debt/EBITDA
2.68
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$217.59
Current Price
$215.82
Margin of Safety
+0.8%
Fair Value Range
$166.01 - $269.18
Estimation Methods
Valuation Metrics
P/E Ratio
20.67
ROE
30.6%
P/B Ratio
7.97
P/FCF
16.40
Gross Margin
62.2%
ROIC
16.1%
Profitability Radar
Value Creation (Economic Moat)
ROIC
16.1%
WACC
8.1%
ROIC − WACC
+8.0 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (20)
- EPS shows upward trend
- EPS CAGR 9.76%
- Price CAGR 11.37%
- ROIC 16.1%
- Gross Margin 62.2%
- P/FCF 16.40
- Debt/Equity ratio
- Operating Margin 23.5%
- Positive Free Cash Flow
- Current Ratio
- Debt/EBITDA
- Return on Tangible Assets
- ROE 35.3%
- Revenue Growth 5Y 12.0%
- Analyst Consensus 78% Buy
- Earnings Surprise avg 10.9%
- PEG Ratio 1.54
- Earnings Quality (OCF/NI) 1.53
- Share Dilution -2.1%
- Piotroski F-Score 6/9
Failed (6)
- P/B Ratio 7.97
- CapEx intensity
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Net Margin Trend 16.4% vs 17.2%
Unavailable (2)
- Dividend Payout NaN%
- Interest Coverage
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Joseph D. Mansueto | Founder & Executive Chairman of the Board | 69 |
| Mr. Kunal Kapoor C.F.A., CFA | CEO & Director | 50 |
| Mr. Michael John Holt C.F.A. | Chief Financial Officer | 45 |
| Mr. Conan Wiersema | Chief Accounting Officer & Principal Accounting Officer | 46 |
| Sarah Bush | Director of Investor Relations | - |
| Ms. Kathleen Peacock | Chief Legal Officer | - |
| Stephanie Lerdall | Senior Manager of Media Relations | - |
| Ms. Marie Trzupek Lynch | Chief People Officer | - |
| Mr. David W. Williams | Chief Design Officer | 64 |
| Mr. Thomas Mark Idzorek | Head of Investment Methodology & Economic Research | 54 |
Audit Risk
3
Board Risk
6
Compensation Risk
7
Shareholder Rights Risk
2
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for MORN, sourced from Markets Gazette.