MSCI: Quality Business At A Decent Valuation
Summary
- MSCI remains a "strong buy" due to its duopolistic market position, sustainable growth, and undervaluation despite recent price increases.
- The company boasts a strong revenue CAGR of 13% and a free cash flow margin of 48.5%, driven by its asset-light business model.
- Risks include cyclical demand in the ESG segment and elevated net debt, though debt maturity is well-managed with conservative interest coverage.
- MSCI's valuation remains attractive, with a price-to-free cash flow ratio 15.8% lower than the historical average, indicating continued undervaluation.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of MSCI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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