GET DAILY SIGNALSMoody's (MCO) Posts Mixed Q3 2026 Results as Analytics Growth Offsets Ratings Softness
Key Takeaways
- Moody's reported third-quarter 2026 revenue of $2.02 billion, up about 1% year over year, below the consensus estimate of roughly $2.08 billion.
- Adjusted diluted earnings per share (EPS, or profit per share) came in at $4.14, up 6% from a year ago but below the consensus estimate of about $4.25.
- Diluted GAAP EPS rose 18% to $4.24, while net income increased to $734 million from $646 million a year earlier.
- Moody's Analytics revenue grew 3% to $936 million, while Moody's Investors Service revenue slipped about 1% on softer leveraged-finance issuance.
- The company reaffirmed its full-year 2026 adjusted EPS guidance of $16.50 to $17.00, and shares fell roughly 3% in premarket trading after the release.
Why Moody's Results Matter for Investors
Moody's Corporation runs two complementary businesses: MCO's Investors Service credit rating agency and Moody's Analytics, which provides data, research, and risk-management tools. Ratings revenue tracks closely with debt issuance, giving a timely view of capital markets activity, while the analytics side shows demand for software and AI-driven solutions. This quarter's numbers matter because they show whether steady recurring revenue in analytics can balance softer leveraged-finance issuance. I also checked this using Tickeron's AI Screener to compare MCO against peers in the financial data space.
Quarterly Results in Detail
For the third quarter ended September 30, 2026, MCO posted total revenue of $2.02 billion, up roughly 1% from $2.01 billion a year earlier and just below the consensus estimate of about $2.08 billion. Adjusted diluted EPS reached $4.14, a 6% increase from $3.92 but short of the roughly $4.25 analysts had projected. On a GAAP basis, diluted EPS climbed 18% to $4.24, and net income rose to $734 million from $646 million.
Moody's Investors Service revenue came in at $1.09 billion, down about 1%, due to lower leveraged-finance issuance versus a strong prior-year period. Investment-grade transaction revenue grew 18%, helped by financing for AI infrastructure. Moody's Analytics revenue reached $936 million, up 3% as reported and 8% on an organic constant-currency basis. Annualized recurring revenue increased 8% to $3.7 billion. The adjusted operating margin was 52.6%, down 30 basis points from 52.9% a year ago.
Market Reaction and Sentiment
MCO shares fell about 3% in premarket trading after the report, with both revenue and adjusted EPS missing estimates. The reaction focused on the ratings business shortfall from softer leveraged-finance activity, even as investment-grade issuance tied to AI infrastructure held up. Investors weighed that against the resilience in Moody's Analytics, where recurring revenue now makes up about 99% of the segment and ARR grew 8%. The decision to hold full-year guidance steady, rather than raise it, also influenced sentiment following a stronger second quarter.
Outlook and Factors to Watch
MCO reaffirmed its full-year 2026 outlook, including adjusted diluted EPS of $16.50 to $17.00, revenue growth in the high-single-digit range, and free cash flow of $2.7 billion to $2.9 billion. Management kept its share repurchase authorization of up to $3.0 billion in place, indicating continued confidence in returning capital.
Key items to monitor include the pace of debt issuance. The company expects fourth-quarter rated issuance to decline in the mid-teens percentage range year over year, with leveraged loans projected to fall roughly 10% for the full year. Investment-grade issuance should rise about 10%, and structured finance is expected to grow in the low-double-digit range.
Analytics momentum remains important as well. ARR growth of roughly 8%, a 95% retention rate, and strength in lending, insurance, and KYC compliance solutions give a more stable revenue base. Rapid adoption of AI-enabled tools is another area to track, with management noting sharp growth in usage of its research tools recently. From what I see, credit quality and financing conditions also deserve attention, with the global speculative-grade default rate expected to ease modestly to about 3.7% by year-end 2026.
AI Tools in My Research Process
When reviewing earnings like these, I frequently rely on Tickeron's AI tools to scan for patterns and compare performance across the sector. The AI Screener stands out for quickly filtering stocks by technical signals, fundamentals, and industry trends, which helps me spot momentum shifts that complement traditional financial analysis. It has become a regular part of how I evaluate names in the ratings and data space without replacing core fundamental work.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
MCO's Indicator enters downward trend
The Aroon Indicator for MCO entered a downward trend on October 13, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 131 similar instances where the Aroon Indicator formed such a pattern. In 82 of the 131 cases the stock moved lower. This puts the odds of a downward move at 63%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
MCO moved below its 50-day moving average on October 20, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MCO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 53%.
MCO broke above its upper Bollinger Band on October 15, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where MCO's RSI Oscillator exited the oversold zone, 16 of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 64%.
The Momentum Indicator moved above the 0 level on October 12, 2026. You may want to consider a long position or call options on MCO as a result. In 61 of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.
The Moving Average Convergence Divergence (MACD) for MCO just turned positive on October 09, 2026. Looking at past instances where MCO's MACD turned positive, the stock continued to rise in 28 of 45 cases over the following month. The odds of a continued upward trend are 62%.
Following a +4.82% 3-day Advance, the price is estimated to grow further. Considering data from situations where MCO advanced for three days, in 217 of 352 cases, the price rose further within the following month. The odds of a continued upward trend are 62%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 16 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 48 (best 1 - 100 worst), indicating fairly steady price growth. MCO’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 56 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is 69 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 98 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: MCO's P/B Ratio (27.214) is very high in comparison to the industry average of (3.969). P/E Ratio (30.066) is within average values for comparable stocks, (16.930). Projected Growth (PEG Ratio) (1.609) is also within normal values, averaging (1.780). Dividend Yield (0.009) settles around the average of (0.019) among similar stocks. P/S Ratio (10.132) is also within normal values, averaging (7.166).
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