Is MCO a high-quality business?

AlphaMadera's AlphaQuality grade scores Moody's Corporation on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how MCO compares to a Buffett-style quality bar.

What is Moody's Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to MCO based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes MCO a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

MCO - Moody's Corporation

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $544.75 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

A- 81.8 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

A- 81.6

5yr Avg ROIC 18.6% 89/100
Operating Margin Trend +0.34 pp/yr 65/100

Capital Efficiency

Weight: 15%

A+ 93.2

5yr Avg ROE 47.9% 100/100
5yr Share-Count CAGR -1.1% 81/100

Growth Quality

Weight: 25%

C+ 60.3

5yr Revenue CAGR 5.6% 63/100
5yr EPS CAGR 3.8% 46/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 20%

A+ 99.8

5yr FCF Margin 30.5% 100/100
5yr FCF/NI Conversion 1.03x 99/100

Balance Sheet

Weight: 10%

A 90.8

Net Debt / EBITDA 1.25x 81/100
Interest Coverage (EBIT/Int) 18.28x 97/100
Altman Z-Score 7.16 100/100

Stability

Weight: 5%

B- 63.5

EPS Volatility (σ/μ) 0.44 37/100
Piotroski F-Score 8 89/100
Negative-Revenue Years (5) 1/5 80/100

7 of 7 gurus held; 1 new buy; 2 added; 2 trimmed; 1 full exit.

Holders: 7
Avg Δ position: -4.8%
New buys: 1
Full exits: 1

Laffont sold -100%
Li Lu new
Wood decreased -92%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.