Moody's Corporation

We assess Moody’s as possessing multiple, reinforcing moats. Component scores and weights: switching costs 90 (30% weight), network effects 85 (25%), intangible assets 95 (20%), efficient scale 95 (15%), cost advantage 80 (10%).

Weighted result ≈ 90. Switching costs are high because issuers and investors embed Moody’s ratings in covenants, benchmarks, and processes; changing agencies risks market access and pricing. Network effects arise from the breadth of coverage and investor reliance that make Moody’s signals more valuable as adoption increases.

Intangible assets include brand, methodologies, and regulatory licenses as an SEC‑registered NRSRO and a global leader in outstanding ratings. Efficient scale persists because a handful of NRSROs serve a market not large enough to support many full‑line competitors, and regulation discourages fragmentation.

Cost advantages stem from data reuse across ratings and analytics, though less central than other moats. Evidence: 10 NRSROs globally with Moody’s recording ~675k outstanding ratings as of 2024; recurring-revenue analytics (Orbis, KYC, RMS) increases stickiness and cross‑sell.

Risks: disintermediation attempts by private models/AI, regulatory changes, reputational events, and growth of alternative CRAs (KBRA, DBRS). Our view is the moat durability remains very high over 10+ years.