Credit rating agency Moody's has posted improving profit growth for the last three consecutive quarters, putting up a hefty 31% gain last quarter. The rise comes after weakness last year amid the bear market, but it remains to be seen whether the company has fully turned the corner and Moody's stock will continue rising.
One bright spot — on Thursday, the Relative Strength (RS) Rating for Moody's stock climbed up into a new percentile as it got a big lift, from 63 to 75. The upgraded 75 RS Rating means that Moody's stock outperformed 75% of all stocks this past year on price performance.
Market research shows that the best-performing stocks often have an 80 or better RS Rating as they begin their largest price moves. See if Moody's stock can continue to rebound and clear that threshold.
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Moody's Stock Rose On Strong Sales, Profit Growth
Among its other ratings, Moody's stock sports an 89 Composite Rating, out of 99, an 85 Earnings Per Share Rating and a bullish A SMR Rating (sales + profit margins + return on equity).
Its D+ Accumulation/Distribution Rating, on an A+ to E scale, shows that institutional investors like ETFs and mutual funds are selling more shares than buying. Look for that to improve to a C or better. Still, the number of funds holding Moody's stock rose from 2,263 for the December-ended quarter to 2,386 in September, a bullish sign.
Moody's stock dropped to a 230.16 low on Oct. 13, 2022, as the 2022 bear market was ending. It traded at about 310 Thursday afternoon, down about 1% for the day.
Earnings Improved Over Past Year
Taking a look at top and bottom line numbers, Moody's has posted rising EPS growth over the last year. Last quarter the New York-based company reported 31% EPS growth to $2.43 on 15% higher revenue to $1.47 billion. The prior three periods its EPS reversed from a 31% drop for the December 2022-ended quarter to a 3% gain, then a 4% rise.
Top line growth has also increased during the same period.
Moody's stock holds the No. 4 rank among its peers in the Commercial Services-Market Research industry group. Verisk Analytics and FactSet Research Systems are also among the group's top 5 highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary Relative Strength Rating tracks share price action with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the last 52 weeks stacks up against all the other stocks in our database.
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