Moody's stock dips after Q3's double-miss, guidance disappoints

Moody’s (MCO) stock slid 3.0% in Wednesday premarket trading after the debt rating and analytics company delivered a double-miss for its Q3 results. Furthermore, the company reaffirmed its earnings guidance, which indicates a potential miss for the year.

The ratings and market analytics company reaffirmed its full-year 2026 adjusted EPS guidance at $16.50-$17.00 (midpoint $16.75 vs. $16.90 consensus). Its revenue is still expected to increase in the high-single-digit percentage range. The company continues to project free cash flow of $2.7B-$2.9B vs. the Visible Alpha consensus of $2.9B.

For Q3, Moody's (MCO) results eased from a strong Q2 and increased from the year-ago period.

Q3 adjusted EPS of $4.14, trailing the average analyst estimate of $4.25, decreased from $4.68 in Q2 and increased from $3.92 in last year’s Q3.

Q3 revenue of $2.02B, missing the $2.08B consensus, fell from $2.19B in the prior quarter and rose from $2.01B in the year-ago period.

Investors Services revenue of $1.09B compared with $1.26B in the previous quarter and $1.10B a year ago. The 1% decline primarily reflected lower leveraged finance issuance.

Analytics revenue of $936M climbed from $925M in Q2 and $909M in the prior year’s Q3. The division’s 3% Y/Y growth included flat growth in Decision Solutions, a 3% increase in Research and Insights, and a 7% rise in Data and Information revenue.

Expenses of $1.12B, vs. the Visible Alpha estimate of $1.11B, decreased from $1.14B in Q2 and increased from $1.09B in Q3 2025.

Adjusted operating margin of 52.6% vs. 55.3% in the prior quarter and 52.9% a year ago.

Conference call at 9:00 AM ET.

Earlier, Moody's Non-GAAP EPS of $4.14 misses by $0.11, revenue of $2.02B misses by $60M