Is MSCI Still the King of Compounders? Let’s Talk Numbers
Ever heard of a toll bridge business? It’s basically a company that gets paid every time someone wants to move their money around. MSCI is the perfect example. Most people think they just provide indices, but if you look under the hood, this company is a high performance money making machine.
The Money Machine More Than Just Selling Indices
I’ve been tracking their revenue from 2017 until now, and man, the chart just keeps climbing without looking back.
Their revenue grew by 154% in total, but what’s even more insane is their profit. Their Net Income actually jumped by 334%. How? It’s all about operating leverage. As revenue goes up, their operating costs don't follow at the same pace. That’s why their margins stay comfortably above 40%.
Sane Valuation? Finally...
Back in 2021, MSCI’s valuation was looking a bit aggressive (translation: way too expensive). But now, the story has changed.
The Forward P/E is now sitting around 28x. For a diamond tier business like this, that price feels way more grounded. You’re getting a company with massive pricing power at a price that isn't trapped in the overhype zone anymore.
Technical Peek & Future Outlook
Looking at the daily chart, MSCI is currently chilling in a consolidation zone.
Price is hovering around $581. The Stochastic indicator is getting close to the oversold area, so we might see a little bounce soon. But the real meat is in the future projections.
By 2028, analysts are confident that sales will hit $4.10B and EPS will climb to 25.52. If they hit these targets, today's price is going to look like a bargain in a few years.
Quick Market Check
- ESG Leadership they are going all in on their Climate Action indices, staying dominant in the green investing space.
- Safe Haven their subscription based model keeps the cash flowing even when the broader market gets shaky
My Take
MSCI is the kind of stock that lets you sleep at night. The fundamentals are solid, cash flow is everywhere, and the valuation has finally come back down to earth. I’m watching the support level at $578 for the right moment to move.
What do you guys think? Is MSCI still the king of your portfolio, or are you eyeing something else?
Keep trading and stay profitable:)
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This article was originally researched and written by me. To maintain transparency across Web3 platforms, please note that a version of this post was first published on my Hive blog (@rizqimaruf). You can find the original Hive post here: https://inleo.io/@rizqimaruf/msci-inc-a-money-making-machine-finally-back-to-a-sane-valuation-edf?referral=rizqimaruf
