DCF Tool

MCO

Moody`s Corp. – Credit Bureaus
moody's is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. moody's corporation (nyse: mco) is the parent company of moody's investors service, which provides credit ratings and research covering debt instruments and securities, and moody's analytics, which offers leading-edge software, advisory services and research for credit and economic analysis and financial risk management. the corporation, which reported revenue of $3.3 billion in 2014, employs approximately 9,900 people worldwide and maintains a presence in 33 countries. further information is available at www.moodys.com.
Analysis Results
Intrinsic Value $195.87
Latest Price $322.81
Relative Value 65% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 8.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 8.3%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.39 2.18
2024 2.59 2.15
2025 2.8 2.13
2026 3.03 2.1
2027 3.28 2.07
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 43.9 billion. This corresponds to a present value of 25.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 10.6 billion. Adding in the terminal value gives a total present value of 35.9 billion.

There are presently 184.0 million outstanding shares, so the intrinsic value per share is 195.87.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,094,000,000
Current Cash 1,859,000,000
Current Liabilities 2,375,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -140,000,000
Change in NCWC 247,000,000
EBIT 2,014,000,000
Tax Provision 386,000,000
Depreciation and Amortization 331,000,000
Capital Expenditure -283,000,000
Unlevered Free Cash Flow 1,867,293,181
Current Assets 4,011,000,000
Current Cash 1,902,000,000
Current Liabilities 2,496,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -387,000,000
Change in NCWC 22,000,000
EBIT 2,844,000,000
Tax Provision 541,000,000
Depreciation and Amortization 257,000,000
Capital Expenditure -139,000,000
Unlevered Free Cash Flow 2,425,523,049
Current Assets 4,509,000,000
Current Cash 2,696,000,000
Current Liabilities 2,222,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -409,000,000
Change in NCWC -246,000,000
EBIT 2,453,000,000
Tax Provision 452,000,000
Depreciation and Amortization 220,000,000
Capital Expenditure -103,000,000
Unlevered Free Cash Flow 1,826,576,940
Current Assets 3,679,000,000
Current Cash 1,930,000,000
Current Liabilities 1,912,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -163,000,000
Change in NCWC -83,800,000
EBIT 2,088,000,000
Tax Provision 381,000,000
Depreciation and Amortization 200,000,000
Capital Expenditure -69,000,000
Unlevered Free Cash Flow 1,695,681,767
Current Assets 3,386,900,000
Current Cash 1,817,500,000
Current Liabilities 2,098,500,000
Current Debt 449,900,000
Non-Cash Working Capital (NCWC) -79,200,000
Change in NCWC 157,400,000
EBIT 1,939,000,000
Tax Provision 351,600,000
Depreciation and Amortization 191,900,000
Capital Expenditure -90,400,000
Unlevered Free Cash Flow 1,789,909,335
Current Assets 2,580,600,000
Current Cash 1,183,300,000
Current Liabilities 2,063,300,000
Current Debt 429,400,000
Non-Cash Working Capital (NCWC) -236,600,000
Change in NCWC 863,400,000
EBIT 1,844,900,000
Tax Provision 779,100,000
Depreciation and Amortization 158,300,000
Capital Expenditure -90,600,000
Unlevered Free Cash Flow 1,971,566,605
Current Assets 3,253,100,000
Current Cash 2,224,900,000
Current Liabilities 2,428,200,000
Current Debt 300,000,000
Non-Cash Working Capital (NCWC) -1,100,000,000
Change in NCWC -892,400,000
EBIT 1,525,900,000
Tax Provision 282,200,000
Depreciation and Amortization 126,700,000
Capital Expenditure -115,200,000
Unlevered Free Cash Flow -126,700,681
Current Assets 3,243,100,000
Current Cash 2,232,200,000
Current Liabilities 1,218,500,000
Current Debt 0
Non-Cash Working Capital (NCWC) -207,600,000
Change in NCWC -16,700,000
EBIT 1,485,200,000
Tax Provision 430,000,000
Depreciation and Amortization 113,500,000
Capital Expenditure -89,000,000
Unlevered Free Cash Flow 1,030,086,111
Current Assets 2,686,400,000
Current Cash 1,677,600,000
Current Liabilities 1,199,700,000
Current Debt 0
Non-Cash Working Capital (NCWC) -190,900,000
Change in NCWC 87,900,000
EBIT 1,448,700,000
Tax Provision 455,000,000
Depreciation and Amortization 95,600,000
Capital Expenditure -74,600,000
Unlevered Free Cash Flow 1,106,430,595
Current Assets 2,968,800,000
Current Cash 2,106,300,000
Current Liabilities 1,141,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) -278,800,000
Change in NCWC 69,900,000
EBIT 1,243,400,000
Tax Provision 353,400,000
Depreciation and Amortization 93,400,000
Capital Expenditure -42,300,000
Unlevered Free Cash Flow 988,604,601
Current Assets 2,525,700,000
Current Cash 1,773,300,000
Current Liabilities 1,164,900,000
Current Debt 63,800,000
Non-Cash Working Capital (NCWC) -348,700,000
Change in NCWC 64,400,000
EBIT 1,094,400,000
Tax Provision 324,300,000
Depreciation and Amortization 93,500,000
Capital Expenditure -45,000,000
Unlevered Free Cash Flow 860,704,375

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