Morningstar Inc. (MORN) is emerging as a compelling investment opportunity, with analysts highlighting its resilient revenue growth, expanding global footprint, and attractive valuation metrics. The stock's recent performance reflects growing confidence in its long-term positioning within the financial data and advisory ecosystem.
- MORN reported $228 million in non-GAAP operating income for fiscal 2024, up 12% YoY.
- Subscription revenue accounted for 78% of total revenue in 2024.
- International revenue grew 15% year-over-year with new platforms launched in Singapore and São Paulo.
- The company maintains a 79% gross margin, above the sector average.
- Forward P/E of 18.3, below the 24.1 sector median, indicating potential undervaluation.
- MORN generated $1.4 billion in free cash flow and returned $570 million to shareholders over three years.
Morningstar Inc. (MORN) is demonstrating strong fundamentals that support a bullish outlook, particularly in a market environment where data-driven decision-making is increasingly critical. The company reported non-GAAP operating income of $228 million in fiscal year 2024, a 12% year-over-year increase, underpinned by steady growth in its investment research and portfolio management platforms. Revenue from its U.S. institutional business grew 9% during the same period, driven by expanded client retention and new contract wins with asset managers and pension funds. The company’s subscription-based model continues to deliver predictable cash flow, with subscription revenue accounting for 78% of total revenue in 2024. Morningstar’s global reach expanded with the launch of localized data platforms in Singapore and São Paulo, contributing to a 15% increase in international revenue. These initiatives are expected to bolster long-term margins, as the company maintains a gross margin of 79%—above the industry average for data and information services. MORN currently trades at a forward price-to-earnings ratio of 18.3, significantly below the sector median of 24.1, suggesting potential undervaluation relative to its growth trajectory. Analysts note that Morningstar’s $8.2 billion in net cash and $1.4 billion in annual free cash flow provide a strong financial foundation for strategic acquisitions or shareholder returns through buybacks. The company has returned $570 million to shareholders via dividends and share repurchases over the past three years. The stock’s momentum has drawn attention from institutional investors, with ownership by major funds increasing by 7.3 percentage points since Q1 2023. As demand for independent research and ESG analytics rises, Morningstar’s proprietary data sets and AI-enhanced tools position it to capture additional market share, particularly in the growing sustainable investing sector.