Morningstar, Inc.

MORN

Investment Advice

Mkt Cap

$12.5B

PE

58.69

Debt

$981.5M

Cash

$353.7M

EV

$13.12B

FCF

$262.9M

Market Cap

$12.5B

P/E Ratio

58.69

Debt

$981.5M

Cash

$353.7M

EV

$13.12B

FCF

$262.9M

Charts data: {"Earnings":[{"time":"2014-12-30","value":78259000},{"time":"2015-12-30","value":132600000},{"time":"2016-12-30","value":161000000},{"time":"2017-12-30","value":136900000},{"time":"2018-12-30","value":183000000},{"time":"2019-12-30","value":152000000},{"time":"2020-12-30","value":223600000},{"time":"2021-12-30","value":193300000},{"time":"2022-12-30","value":70500000},{"time":"2023-12-30","value":141100000}],"Sales":[{"time":"2014-12-30","value":760071000},{"time":"2015-12-30","value":788800000},{"time":"2016-12-30","value":798600000},{"time":"2017-12-30","value":911700000},{"time":"2018-12-30","value":1019900000},{"time":"2019-12-30","value":1179000000},{"time":"2020-12-30","value":1389500000},{"time":"2021-12-30","value":1699300000},{"time":"2022-12-30","value":1870600000},{"time":"2023-12-30","value":2038600000}],"Net Margins":[{"time":"2014-12-30","value":0.10296274953260945},{"time":"2015-12-30","value":0.16810344827586207},{"time":"2016-12-30","value":0.20160280490859003},{"time":"2017-12-30","value":0.15015904354502577},{"time":"2018-12-30","value":0.17942935581919797},{"time":"2019-12-30","value":0.1289228159457167},{"time":"2020-12-30","value":0.1609211946743433},{"time":"2021-12-30","value":0.11375272170893898},{"time":"2022-12-30","value":0.03768844221105527},{"time":"2023-12-30","value":0.06921416658491121}],"Assets":[{"time":"2014-12-30","value":1019281000},{"time":"2015-12-30","value":1029000000},{"time":"2016-12-30","value":1350900000},{"time":"2017-12-30","value":1405700000},{"time":"2018-12-30","value":1453800000},{"time":"2019-12-30","value":2370900000},{"time":"2020-12-30","value":2696000000},{"time":"2021-12-30","value":2862700000},{"time":"2022-12-30","value":3474800000},{"time":"2023-12-30","value":3403400000}],"Stockholders Equity":[{"time":"2014-12-30","value":654398000},{"time":"2015-12-30","value":640600000},{"time":"2016-12-30","value":696800000},{"time":"2017-12-30","value":804900000},{"time":"2018-12-30","value":934700000},{"time":"2019-12-30","value":1083600000},{"time":"2020-12-30","value":1271400000},{"time":"2021-12-30","value":1415900000},{"time":"2022-12-30","value":1207100000},{"time":"2023-12-30","value":1327800000}],"ROE":[{"time":"2014-12-30","value":0.11958930192329438},{"time":"2015-12-30","value":0.20699344364658134},{"time":"2016-12-30","value":0.23105625717566017},{"time":"2017-12-30","value":0.1700832401540564},{"time":"2018-12-30","value":0.1957847437680539},{"time":"2019-12-30","value":0.14027316352897748},{"time":"2020-12-30","value":0.17586912065439672},{"time":"2021-12-30","value":0.13652094074440285},{"time":"2022-12-30","value":0.058404440394333526},{"time":"2023-12-30","value":0.10626600391625245}],"ROA":[{"time":"2014-12-30","value":0.11375469571197737},{"time":"2015-12-30","value":0.18950437317784258},{"time":"2016-12-30","value":0.16670367902879563},{"time":"2017-12-30","value":0.1262716084513054},{"time":"2018-12-30","value":0.1589627183931765},{"time":"2019-12-30","value":0.08005398793707032},{"time":"2020-12-30","value":0.10144658753709199},{"time":"2021-12-30","value":0.08977538687253292},{"time":"2022-12-30","value":0.04829054909635087},{"time":"2023-12-30","value":0.06775577363812658}]}

Morningstar, Inc. provides independent investment insights in the United States, Canada, Asia, Australia, Europe, the United Kingdom, and internationally. The company provides investment data, fundamental equity and manager research, private capital markets research, credit and fund rating, and index; environmental, social, and governance (ESG) rating, as well as indexes directly on its proprietary desktop or web-based software platforms, or through subscriptions, data feeds, and third-party distributors; and investment offerings, including managed investment products, publicly listed and private companies, fixed income securities, private credit, and bank loans. It also provides Morningstar Data that offers data and research to asset managers, redistributors, and wealth managers; Morningstar Direct, an investment-analysis platform; Morningstar Managed Portfolios, an advisor service to reduce compliance risk, as well as offers asset-allocation services; Morningstar Advisor Workstation, a web-based research, investment planning, and portfolio analysis platform; and Morningstar.com, a data, editorial, and research content product, as well as Morningstar Office. In addition, the company offers Morningstar Enterprise Components; Morningstar Indexes for creating investment products and other portfolios; Morningstar workplace solutions, such as retirement accounts, fiduciary services, allocation funds, and custom models; and PitchBook Platform, research and analysis workstation for investment and research professionals. Further, it provides Morningstar Research; DBRS Morningstar; and Morningstar Sustainalytics, as well as a mobile application, CRM integrations, excel plug-in, data feeds, and data solutions through PitchBook. The company serves financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors, as well as issuers of securities. Morningstar, Inc. was incorporated in 1984 and is based in Chicago, Illinois.

Sector

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DCF

Discounted Cash Flow Valuation of Morningstar, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$262.9M	$274.7M	$287.1M	$300M	$313.5M	$327.6M	$342.3M	$357.7M	$373.8M	$390.7M	$408.2M	$4.082B
DCF		$238.9M	$217.1M	$197.3M	$179.2M	$162.9M	$148M	$134.5M	$122.2M	$111M	$100.9M	$1.009B
Value	$2.621B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -4.9%

Earnings Stability 5.8%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	17%	20%	15%	18%	13%	16%	11%	3.8%	6.9%	10%
ROA	19%	17%	13%	16%	8%	10%	9%	4.8%	6.8%	8.8%
ROE	21%	23%	17%	20%	14%	18%	14%	5.8%	11%	15%

What is the average Net Margin?

The average Net Margin over the past 5 years is +11.5%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -2.49%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.1%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.61%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +13.55%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -2.09%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	0.19	0.00	-	0.29	2.06	1.46	1.03	6.78	5.10	3.73
Debt Equity	0.05	0.00	-	0.07	0.48	0.35	0.25	0.95	0.76	0.71
MIN
Graham Stability	-	-	100%	100%	95%	100%	100%	37%	87%	37%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 3.73.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 1.08.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.37.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	14%	15%	14%	9%	1.2%
Net Income	-1.9%	-5.1%	-14%	100%	-1.9%
Stockholders Equity	9.6%	7.3%	1.5%	10%	-0.49%
FCF	3.9%	-3.7%	-14%	17%	-11%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +14.86%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.16%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -5.07%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.93%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +7.27%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.49%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -3.74%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -10.74%.