MSCI Inc. (MSCI): A Bull Case Theory

We came across a bullish thesis on MSCI Inc. on Dividendology’s YouTube Channel. In this article, we will summarize the bulls’ thesis on MSCI. MSCI Inc.’s share was trading at $587.44 as of January 13th. MSCI’s trailing and forward P/E were 37.19 and 30.30 respectively according to Yahoo Finance.

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial products, such as ETFs, mutual funds, annuities, futures, options, structured products, etc.

Recent insider activity has drawn attention to MSCI, with the CEO making a series of share purchases in early December at a time when the stock has materially lagged the broader market. MSCI shares are down roughly 14.5% over the past year and up only about 8% over the last three years, a wide underperformance versus the S&P 500. This disconnect is notable because company fundamentals have continued to strengthen, with revenue growth far outpacing share price performance, implying that valuation has quietly improved despite limited stock appreciation.

From a fundamental standpoint, MSCI has delivered consistent and durable growth. Revenue expanded from roughly $1.7 billion in 2020 to about $2.86 billion by the end of 2024, extending a long record of steady expansion that dates back nearly two decades. Since around 2015, annual revenue growth has typically ranged between 8% and 12%, reflecting a highly predictable business model. This stability is supported by MSCI’s diversified platform across index licensing, analytics and risk models, ESG and climate data, and private assets and real estate analytics, with the majority of revenue being recurring and client retention rates near 95%.

The recent stock weakness appears driven by a moderation in growth rather than any deterioration in the business. Over the trailing twelve months, revenue growth slowed to about 7%, prompting multiple compressions. While MSCI still trades at a premium valuation with a trailing P/E of around 34, this is well below historical levels that often reached the 40s or higher. Recent positives include a modest increase in 2025 free cash flow guidance and several product launches across private equity, regional equities, and biodiversity tools. With analysts projecting roughly 12% annual earnings growth through 2029, MSCI offers attractive long term return potential, helping explain the recent insider buying despite near term valuation headwinds.

Previously, we covered a bullish thesis on MSCI Inc. by Business Model Mastery in February 2025, which highlighted the company’s dominant position in global indices, powerful network effects, and high client lock in. The company’s stock price has appreciated by approximately by 2.21% since our coverage. Dividendology shares a similar thesis but emphasizes insider buying and valuation support driving future returns.

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Disclosure: None.