Is Moody's Corp. overvalued or undervalued?

As of 30 June 2025, Moody's Corp. has moved from fair to expensive in its valuation grade. The company is currently overvalued, as indicated by its high P/E ratio of 72, a Price to Book Value of 44.52, and an EV to EBITDA ratio of 48.46. In comparison, S&P Global, Inc. has a more reasonable P/E ratio of 43.64 and an EV to EBITDA of 28.86, highlighting the premium at which Moody's is trading relative to its peers.
Despite a strong return on equity of 62.01% and a robust dividend yield of 39.88%, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of 1.89% compared to the index's 12.22%. This trend continues over longer periods, as Moody's has underperformed the S&P 500 over the past year and five years, suggesting that the current valuation may not be justified given its recent stock performance.