VOL. XCIV, NO. 247
★ MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 5 CENTS
Tuesday, December 23, 2025
Moody's Corporation
MCO · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Moody's operates a global credit ratings franchise (Moody's Investors Service) alongside a large analytics and data/software business (Moody's Analytics). The ratings segment is an oligopoly with durable advantages from regulatory regimes (e.g., NRSRO/CRA frameworks), entrenched use in debt markets, and brand credibility. The analytics segment faces more competition but benefits from workflow/data lock-in reflected in a high recurring-revenue mix and product reuse across datasets and applications.
Primary segment
Moody's Investors Service (Credit Ratings)
Market structure
Oligopoly
Market share
29%-32% (estimated)
HHI: 3,568
Coverage
2 segments · 5 tags
Updated 2025-12-21
Segments
Moody's Investors Service (Credit Ratings)
Credit ratings and ratings-related research
Revenue
53.5%
Structure
Oligopoly
Pricing
strong
Share
29%-32% (estimated)
Peers
Moody's Analytics (Risk & Data/Software)
Risk analytics, data, and software for financial institutions and corporates
Revenue
46.5%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Moody's Investors Service (Credit Ratings)
Credit ratings and ratings-related research
Revenue_share is based on 2024 external segment revenue (MIS $3,793m / total external $7,088m). Operating_profit_share is based on 2024 segment adjusted operating income (MIS $2,394m / total $3,408m).
Regulated Standards Pipe
Legal
Regulated Standards Pipe
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 3 evidence
MIS operates as a registered NRSRO and within multiple jurisdictional CRA regimes; compliance, governance, and supervisory requirements raise barriers and embed ratings in regulated capital markets.
Erosion risks
- Regulatory efforts to reduce mechanistic reliance on ratings
- Regulatory enforcement actions or litigation
- Model risk / headline rating failures harming credibility
Leading indicators
- Major regulatory changes affecting NRSRO/CRA frameworks
- SEC/ESMA enforcement actions and fines
- Share of rated issuance requiring multiple ratings
Counterarguments
- Ratings are not exclusive licenses; new or smaller CRAs can still compete in niches
- Issuers often buy multiple ratings, limiting single-vendor lock-in
De Facto Standard
Network
De Facto Standard
Strength: 4/5 · Durability: durable · Confidence: 3/5 · 1 evidence
Ratings function as a common language for credit risk assessment across issuers, investors, and intermediaries, reinforcing incumbents through market convention and broad acceptance.
Erosion risks
- Disintermediation by investors using internal credit models
- Shift toward private credit with less need for public ratings
Leading indicators
- Global bond issuance volumes (investment grade, high yield, structured finance)
- Growth of private credit AUM vs public markets
Counterarguments
- Some investors treat ratings as a starting point and increasingly rely on internal analysis
- Alternative risk scores and data providers can partially substitute for ratings
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Credibility with issuers and investors depends on long-lived reputation, analytical depth, and perceived independence; this is difficult to replicate quickly.
Erosion risks
- Reputational damage from high-profile downgrades or missed risks
- Conflicts-of-interest scrutiny of the issuer-paid model
Leading indicators
- Client satisfaction / renewal indicators for research and data products
- Market share stability in regulator-reported metrics
Counterarguments
- Brand does not prevent fee pressure in weaker issuance environments
- Past crises show reputations can be damaged quickly if confidence is lost
Moody's Analytics (Risk & Data/Software)
Risk analytics, data, and software for financial institutions and corporates
Revenue_share is based on 2024 external segment revenue (MA $3,295m / total external $7,088m). Operating_profit_share is based on 2024 segment adjusted operating income (MA $1,014m / total $3,408m).
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Subscription products are embedded in compliance, KYC, credit risk, and research workflows; recurring revenue and retention dynamics indicate meaningful switching costs once implemented.
Erosion risks
- Customers insource risk models and data engineering
- Data commoditization and price competition
- Data privacy and AI regulation increasing compliance costs
Leading indicators
- Annual recurring revenue (ARR) growth rate
- Recurring revenue mix (% recurring vs transaction)
- Renewal and churn metrics (if disclosed)
Counterarguments
- Many enterprise customers multi-source data/analytics to reduce vendor dependency
- Large vendors (and in-house teams) can replace components over time
Scope Economies
Supply
Scope Economies
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Shared content and datasets (including ratings and research) can be reused across analytics products, supporting multi-product distribution and cross-sell economics.
Erosion risks
- Separation between ratings content and analytics buyers reduces cross-sell
- Competitors replicate datasets or source alternatives
Leading indicators
- Cross-sell attach rates across KYC, data feeds, and risk solutions
- Growth in Decision Solutions and Data & Information sub-LOBs
Counterarguments
- Customers can buy standalone datasets from multiple vendors
- Some analytics segments (e.g., KYC) have many credible alternatives
Brand Trust
Demand
Brand Trust
Strength: 3/5 · Durability: durable · Confidence: 3/5 · 1 evidence
In regulated risk and compliance workflows, vendor credibility and perceived analytical quality matter; Moody's brand and third-party recognition support enterprise adoption.
Erosion risks
- High-profile product failures or data errors
- Cybersecurity incidents affecting trust
Leading indicators
- Customer win/loss commentary vs major peers
- Independent rankings and product-review trends
Counterarguments
- Brand is less decisive in procurement when products are standardized
- Large competitors may bundle analytics with broader data platforms
Evidence
10-K describes MIS as registered with the SEC as an NRSRO and subject to oversight/examination; also discusses multi-jurisdiction CRA regulatory frameworks (e.g., EU supervision).
SEC background explains that NRSROs are under a registration and oversight program; the same page publishes year-end NRSRO statistics used by market participants.
MIS segment results table shows ~60% adjusted operating margin in 2024, consistent with strong pricing power in a concentrated market.
MIS overview section states that Moody's credit opinions are used by institutional investors globally and help issuers access capital.
CEO letter cites repeated external recognition for Moody's ratings franchise (Extel award), consistent with strong brand trust.
Showing 5 of 11 sources.
Risks & Indicators
Erosion risks
- Regulatory efforts to reduce mechanistic reliance on ratings
- Regulatory enforcement actions or litigation
- Model risk / headline rating failures harming credibility
- Disintermediation by investors using internal credit models
- Shift toward private credit with less need for public ratings
- Reputational damage from high-profile downgrades or missed risks
Leading indicators
- Major regulatory changes affecting NRSRO/CRA frameworks
- SEC/ESMA enforcement actions and fines
- Share of rated issuance requiring multiple ratings
- Global bond issuance volumes (investment grade, high yield, structured finance)
- Growth of private credit AUM vs public markets
- Client satisfaction / renewal indicators for research and data products
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.