Why MSCI Stock Is Plummeting Lower Today
MSCI's second-quarter earnings were fine, but the stock is selling off after missing analysts' expectations.
Overview
Shares of global index and analytics provider MSCI (NYSE: MSCI) are down 10% today as of 3 p.m. ET on Tuesday after the company reported second-quarter earnings that disappointed the market.
While sales and adjusted earnings per share (EPS) grew 12% and 19%, respectively, these totals came in shy of Wall Street's expectations. Making matters worse, MSCI slightly raised its 2026 expense guidance as it integrates its new acquisition, First Street, a climate-risk modeling firm.
Details
Ultimately, I don't think today's results are anything to panic about, and I think the market's reaction might be overdone. While MSCI may have previously been priced for perfection in recent years -- frequently trading above 40 times free cash flow (FCF) from 2020 to 2024 -- it currently trades at a much more reasonable 29 times FCF. At this valuation, I think MSCI's Q2 results were perfectly fine, maybe not world-beating, but fine.
Source
Originally published at www.fool.com.