Key Takeaways:
- ETF Licensing Extension: MSCI Inc extended its Master Index License Agreement with BlackRock through 2035, securing long-duration ETF-linked revenue streams tied to over $200 billion in 2025 inflows into MSCI benchmarks.
- AI-Driven Expansion: MSCI Inc reported $10 million in AI-enabled tool sales in 2025 and reduced private market data costs by 30%, strengthening margin leverage across analytics and private asset solutions.
- Price Projection: Based on 9% revenue growth, 58% operating margins, and a 26x exit multiple, MSCI Inc could reach $744 by December 2028 from $512 today.
- Return Profile: This implies 45% upside from $512, equating to a 14% annualized return over 3 years as earnings compound at double-digit rates.
Breaking Down the Case for MSCI Inc.
MSCI Inc. (MSCI) begins 2026 with its BlackRock ETF licensing agreement extended through 2035, securing exposure to over $200 billion of ETF inflows in 2025 and strengthening visibility into asset-based fee growth for the coming year.
Revenue of MSCI stock increased 11% in Q4 2025 as exposure to equity indexes rose 23% to $378 billion, supported by record $50 billion year-to-date ETF inflows early in 2026.
Gross profit reached $2.58 billion in 2025 on 82% margins, while operating income climbed to $1.71 billion with operating margins of 55%, reflecting scalable subscription economics and disciplined expense growth.
However, adjusted EBITDA expenses increased 13% in 2025 as headcount, severance, and technology investments rose, yet AI efficiencies reduced private data costs by over 30% and contributed $10 million in new tool sales.
Last week at UBS Financial Services Conference, CFO Andrew Wiechmann said, “We are a long-term compounder,” and citing 13% revenue CAGR, 15% EBITDA CAGR, and 16% EPS CAGR since IPO as evidence of structural growth durability.
Private Capital Solutions growth rebounded to 15% in the most recent quarter, while index subscription run-rate growth improved to 9% amid accelerating custom indexing and international allocation flows.
At $512 per share and 26x modeled earnings, the stock prices in 9% revenue growth and 58% margins, raising debate over whether sustained ETF momentum and AI-enabled scale justify a $744 valuation by 2028.
What the Model Says for MSCI Stock
Recent performance shows MSCI delivered 9.7% revenue growth and 53.5% operating margins, and extended its BlackRock ETF license through 2035 while capturing more than $200 billion of ETF inflows.
The valuation framework uses a 9.1% revenue growth market assumption and a 58.0% operating margin assumption, and it applies a 26.3x exit multiple that produces a $744.42 target price by 12/31/28.
At a current price of $511.84, the model calculates 45.4% total upside and a 13.9% annualized return, and this level of return exceeds a 10% equity hurdle rate.
The model issues a Buy conclusion as a 13.9% annualized return at a 26.3x exit multiple provides adequate compensation for volatility and sustainability segment pressure within MSCI’s earnings mix.
A 13.9% annualized return surpasses a 10% hurdle rate and supports capital appreciation rather than capital preservation, as the $744.42 target embeds durable asset-based fee growth and stable 58.0% margin expectations.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for MSCI stock:
1. Revenue Growth: 9.1%
MSCI stock delivered 9.7% revenue growth over the last year and 13.1% over 5 years, while 10-year growth of 11.3% shows durable expansion across index and analytics subscriptions.
Asset-based fee momentum supported 2025 revenue of $3.13 billion and ETF-linked inflows above $200 billion, and the BlackRock license extension through 2035 secures visibility into recurring fee streams.
The 9.1% revenue assumption requires sustained ETF inflows and stable retention across sustainability and analytics, and any slowdown toward mid single digits would reduce operating leverage and pressure earnings growth.
This is below the 1-year revenue growth of 9.7%, as index mix matures and ETF flows normalize, and valuation expansion depends on steady subscription growth rather than acceleration.
2. Operating Margins: 58%
Meanwhile, MSCI stock generated 53.5% operating margins over the last year and 52.2% over 5 years, supported by high gross margins of 82.4% and scalable data infrastructure.
In fact, operating income reached $1.71 billion on $3.13 billion of revenue, and management cited productivity gains from AI initiatives that lower cost per data point by over 30%.
The 58.0% margin assumption requires continued cost discipline and mix shift toward index and analytics, and expense growth above revenue growth would reverse leverage and compress earnings power.
This stands above the 1-year operating margin of 53.5%, as incremental margin expansion relies on scale and automation benefits, and valuation stability depends on expense control sustaining those gains.
3. Exit P/E Multiple: 26.3x
MSCI stock traded at 31.5x over the last year and 39.8x over 5 years, while current expectations embed normalization after elevated growth cycles.
The 26.3x exit multiple capitalizes normalized earnings under a 9.1% revenue and 58.0% margin profile, and it assumes steady fee durability without multiple expansion beyond market levels.
The Market assumption for 2026 NTM P/E is 26.3x, and the model aligns with that level as growth moderates and index licensing remains concentrated in large ETF partners.
This is below the 1-year P/E of 31.5x, as earnings durability remains strong yet multiple expansion is limited, and any revenue or margin miss would compress valuation rather than lift it.
What Happens If Things Go Better or Worse?
MSCI stock returns hinge on ETF-linked asset flows, subscription retention across index and analytics, and disciplined margin management through 2030.
- Low Case: If ETF inflows slow and subscription demand softens, revenue grows 7.6% and net margins hold near 41.3% → 7.8% annualized return.
- Mid Case: With steady ETF demand and stable enterprise retention, revenue grows 8.5% and net margins reach 43.4% → 12.7% annualized return.
- High Case: If international flows accelerate and analytics adoption expands, revenue reaches 9.3% and net margins approach 45.1% → 17.1% annualized return.
How Much Upside Does MSCI Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
