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QS Research · Michael Burry's Scion Capital analyst template · 2006

MSCI Inc. (MSCI)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: SHORT

Conviction high · base case -37% · downside -66% · upside -18%

At $636.23 MSCI trades at 15.13x EV/Sales, 26.8x EV/EBITDA and 32.9x P/E, all far above the named peer set; using the peer median EV/EBITDA of 18.0x on TTM EBITDA of $1.94B, subtracting $6.46B net debt and dividing by 71.5M shares gives ~$398/share, -37.4% below today's price. The downside case at 11.2x gives ~$214 (-66.4%) and the upside at 22.6x gives ~$523 (-17.8%), so even the high-end peer multiple leaves no upside. Cash returns exceed free cash flow while net debt is $6.46B and equity is negative, making the current quote an asymmetric short. The market is paying a growth premium that the reported financials do not yet justify.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    MSCI Inc. sells research-based indexes, analytics, sustainability and climate data, and private asset data/tools to global investors, primarily through recurring fixed and variable fee arrangements. Index is the largest segment at 57.0% of FY2025 revenue, with asset-based fees making up 43.1% of that segment. Customer count grew from over 4,400 clients in over 95 countries at FY2020 to about 6,800 clients in more than 100 countries at FY2025, with BlackRock remaining the largest client at 10.8% of FY2025 revenue. Revenue, operating income, net income, and operating cash flow all grew between FY2020 and FY2025.

  2. ✓ 2. Competitive advantage

    MSCI shows consistent revenue and operating income growth from FY2020 through FY2025, with no down years and strong operating cash flow, suggesting pricing power and demand for its index and analytics products. It competes with large, well-known index providers such as S&P DJI, FTSE Russell, Nasdaq, Bloomberg, and Solactive, as well as major analytics and sustainability competitors. The 10-K stresses material risks: BlackRock is 10.8% of FY2025 revenue, clients can pressure asset-based fees or switch indexes, suppliers may also be competitors, and reputational damage could reduce product use. The sources do not state that MSCI has a durable competitive advantage, but the financial trajectory and trademark/credibility focus imply meaningful yet contested advantages.

  3. ✓ 3. 10-Q takeaways

    MSCI's Q3 2026 revenue rose 12.4% y/y to $892.0 million, led by a 24.9% jump in asset-based fees and a 7.7% increase in recurring subscriptions. Adjusted EBITDA margin held essentially flat at 62.2%, while net income increased 7.9% to $351.0 million. Share repurchases reduced the diluted share count 5.6% y/y. No material new risk factors were disclosed beyond those in the FY2025 10-K.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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