Recently, Morningstar Inc (MORN, Financial) has been garnering attention from investors and financial analysts due to its robust financial position. With shares currently priced at $254.75, Morningstar Inc has witnessed a surge of 2.72% over a period, marked against a three-month change of 23.29%. A comprehensive analysis, underpinned by the GuruFocus Score Rating, suggests that Morningstar Inc is well-positioned for substantial growth in the near future.
Deciphering the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is how Morningstar Inc ranks in each of these components:
- 1. Financial strength rank: 5/10
- 2. Profitability rank: 9/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 9/10
- 5. Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, GF value, and momentum, and a moderate rank in financial strength, GuruFocus assigned Morningstar Inc the GF Score of 95 out of 100, which signals the highest outperformance potential.
Understanding Morningstar Inc's Business
With a market cap of $10.87 billion and sales of $1.93 billion, Morningstar Inc is a leading provider of independent investment research to financial advisers, asset managers, and investors. The company focuses its operations on two core sectors: data and research. It offers data on investments such as mutual funds, stocks, exchange-traded funds, closed-end funds, separate accounts, and variable annuities. Further, the company tracks real-time market data of equity, derivative, and currency exchanges and other investments. In its research operation, Morningstar offers analyst research on passive and active mutual funds, alternative funds, and college saving plans. Morningstar's largest share of revenue is generated in the United States of America.
Profitability Rank Breakdown
The Profitability Rank shows Morningstar Inc's impressive standing among its peers in generating profit. The company's strong Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Morningstar Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 16.9%, which outperforms better than 67.84% of 681 companies in the Capital Markets industry. Moreover, Morningstar Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 0.5, and the rate over the past five years is 6. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Morningstar Inc's unparalleled position for potential outperformance. This analysis underscores the importance of considering a company's GF Score when making investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
