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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
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Explore the research to see how business evidence informs assumptions and valuation.
Start with the business evidence, then follow the assumptions through to scenarios and valuation.
Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Valuation and assumptionsMSCI is a wide-moat compounder with 95% retention, 56% operating margins, and 40% ROIC, yet at $554.61 it trades at approximately my probability-weighted intrinsic value of $554. The tension is whether a genuinely exceptional business can still be a mediocre investment when the price.
The weighted average required return of a company's debt and equity providers, used to discount cash flows to the firm.
In this report: MSCI's valuation is highly sensitive to WACC. A 100bp change moves intrinsic value by approximately 22%, from $550 to $430. The WACC of 8.0% reflects a low beta, modest leverage, and an 18.5% tax rate.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: At $554.61, the reverse DCF implies approximately 10-11% FCF growth for a decade. This is consistent with MSCI's historical performance but leaves no margin of safety.
A sustained 20% equity market decline would cut asset-based fee revenue by roughly 15-20%, reducing total revenue growth by 3-5 percentage points and EPS by 10-15%. Because ABF is the highest-margin revenue line, the.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: MSCI's cost base is largely fixed. Revenue growth of 12.2% against headcount growth of 1.9% produced 120bp of operating margin expansion in Q2 2026. The same leverage works in reverse during a downturn.
MSCI licenses equity, fixed-income, factor, thematic, and custom indexes to ETF sponsors, asset managers, hedge funds, and asset owners. Revenue is 73% recurring subscriptions, 25% asset-based fees on AUM in MSCI-linked products, and 2% non-recurring. Index is 57% of revenue, Analytics 23%, Sustainability and Climate.
At $554.61 with 73.1M diluted shares and $6.0bn net debt, the enterprise value is approximately $46.5bn. My reverse DCF implies the market is pricing approximately 10-11% FCF growth for a decade, 56-57% operating margins, and continued buybacks reducing share count by 2% annually. These are consistent with historical performance but.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: At $554.61, the reverse DCF implies approximately 10-11% FCF growth for a decade. This is consistent with MSCI's historical performance but leaves no margin of safety.
MSCI is a wide-moat, high-quality business that is becoming stronger. The stock is fairly valued, not cheap. Base-case intrinsic value of approximately $550 per share is essentially the current price. Probability-weighted expected return over 3-5 years is approximately 9% annualised, with a range of -12% (bear) to +22% (bull). The stock becomes clearly attractive below.
The weighted average required return of a company's debt and equity providers, used to discount cash flows to the firm.
In this report: MSCI's valuation is highly sensitive to WACC. A 100bp change moves intrinsic value by approximately 22%, from $550 to $430. The WACC of 8.0% reflects a low beta, modest leverage, and an 18.5% tax rate.
ETF AUM linked to MSCI indexes ($2.82tn at June 30, 2026) drives asset-based fee revenue, which was $233.1M in Q2 2026, up 26.6%. A 20% market decline reduces ABF revenue.
Organic recurring subscription run-rate growth of 8.1% in Q2 2026, supported by 95.3% retention, determines the stable 73% of revenue. A 200bp change moves EPS.
Operating margin of 56.2% in Q2 2026, expanding on a fixed cost base. Headcount grew 1.9% while revenue grew 12.2%. A 100bp margin change moves EPS.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: MSCI's cost base is largely fixed. Revenue growth of 12.2% against headcount growth of 1.9% produced 120bp of operating margin expansion in Q2 2026. The same leverage works in reverse during a downturn.
Equity markets decline 20-25%. ETF AUM falls to $2.2tn, ABF revenue drops 15%, subscription growth slows to 4%, and retention falls to 93%. Operating margin compresses to 52%. Adjusted EPS declines to approximately $17.50. The multiple compresses to 22x, yielding intrinsic value of approximately.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: MSCI's cost base is largely fixed. Revenue growth of 12.2% against headcount growth of 1.9% produced 120bp of operating margin expansion in Q2 2026. The same leverage works in reverse during a downturn.
Equity markets grow 5-7% annually. ETF AUM reaches $3.5tn by 2028. ABF grows 12-15%, subscription growth is 8-9%, and retention stays above 95%. Operating margin expands to 57%. Adjusted EPS reaches approximately $27 by 2029. The multiple remains 27-29x, yielding intrinsic value of approximately.
Equity markets grow 10%+ annually. ETF AUM reaches $4tn by 2029. ABF grows 18-20%, subscription growth is 10-11%, Private Assets accelerates, and operating margin reaches 59%. Adjusted EPS reaches approximately $32 by 2029. The multiple expands to 32x, yielding intrinsic value of approximately.
ETF AUM linked to MSCI indexes. Supports the thesis if rising; weakens it if a sustained decline exceeds 10% from peak because ABF is 25% of revenue and.
Organic recurring subscription run-rate growth. Positive above 8%; warning below 6% for two consecutive quarters. This is the stable 73%.
Retention rate. Positive above 95%; warning below 92% for two consecutive quarters. Direct evidence of.
Operating margin. Positive above 56%; warning below 53%. Tests whether operating leverage persists as acquisitions.
The sensitivity of operating profit to changes in revenue when some operating costs are fixed.
In this report: MSCI's cost base is largely fixed. Revenue growth of 12.2% against headcount growth of 1.9% produced 120bp of operating margin expansion in Q2 2026. The same leverage works in reverse during a downturn.
Private Assets run-rate growth. Positive above 15%; warning below 8%. Tests whether the second growth.
Segment-level gross margins are not disclosed. A precise breakdown of the asset-based fee rate by product and client type is not available. The exact weighted average cost of debt and maturity schedule is reconstructed from press releases and third-party aggregations rather than a directly verified filing table. Insider ownership percentages were not available in the sources reviewed. The current credit rating was not verified in the sources reviewed.
These model scenarios depend on their inputs. Review the assumptions and supporting evidence alongside the implied values.
earnings multiple v2 · as of 2026-10-25
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