MSCI Inc.

MSCI historically exercises strong pricing power and enjoys industry-leading profit margins. Its core subscription and licensing fees (fixed and asset-based) are mostly recurring, enabling pricing above peer levels.

Operating margins have been very high (contributing to net margins around 39%) although 2024 saw some pressure from investments and one-time items. There is limited direct competition for MSCI’s premier indices and analytics (few providers offer equivalent global coverage and ESG content), allowing MSCI to raise prices gradually over time.

However, some financial media notes emerging challenges from free index alternatives (e.g. Morningstar) and fee pressure from large clients). Nevertheless, MSCI still enjoys significant pricing leverage: its analytics and data services are mission-critical to clients.

In our view, while the company’s margins are already high, they have room to expand modestly as MSCI further scales its solutions and as one-time investments normalize. We rate its pricing power as very strong.