Founded in 1998 and headquartered in New York, MSCI (MSCI – Free Report) provides decision support tools, including indexes, portfolio risk and performance analytics, and corporate governance products and services to institutional investors.
Their applications and solutions help investors in core investment activities, including allocating assets, constructing and optimizing portfolios and understanding and managing investment risk and performance.
MSCI serves 99 of the top 100 largest money managers, and total assets benchmarked to MSCI equity indexes exceed $12.4 trillion globally (as of September 30, 2017).
The company operates through the following segments: Index, Analytics and All Other. Their well-known brands include MSCI, Barra, RiskMetrics, IPD, FEA, InvestorForce and others.
The company has about more than 3,000 employees globally.
Excellent Results and Rising Estimates
MSCI reported excellent results for its fourth quarter 2017, beating on both the top and bottom lines. Q4 EPS came in at $1.15 per share, significantly ahead of the Zacks Consensus Estimate of $0.99.
Operating revenues for Q4 increased 14.3% year-over-year to $334.8 million. Revenue growth was driven mainly by 40.7% increase in asset-based fees (due to higher revenue from ETFs linked to MSCI indexes).
The 2018 guidance was also better than street consensus.
The company has an excellent record of beating estimates, as you can see from the chart below:
MSCI Inc Price, Consensus and EPS Surprise
MSCI Inc Price, Consensus and EPS Surprise | MSCI Inc Quote
Analysts have raised their estimates after excellent earnings report. Zacks Consensus Estimates for the current and next year have increased to $5.41 per share and $6.17 per share from $4.79 and $5.52 respectively, before the report.
Poised to Benefit from ETF Industry’s Exponential Growth
The Exchange Traded Fund (ETF) industry has been growing exponentially. Total assets invested in ETFs and ETPs listed globally reached a new high of $5.15 trillion at the end of January 2018, per ETFGI.