Please ensure Javascript is enabled for purposes of website accessibility

Why Morningstar Stock Gained 34% in April

By Demitri Kalogeropoulos - May 8, 2020 at 11:43AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sales growth was solid through the end of the company's fiscal first quarter in late March.

What happened

Morningstar (MORN 1.61%) shares outperformed a surging market last month. The stock jumped 34% compared to a 13% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally put the software specialist back ahead of the market so far in 2020, but shares are still modestly lower this year.

A trader looking at charts on computer screens.

Image source: Getty Images.

So what

Investors celebrated the financial research firm's first-quarter earnings results that showed solid sales growth. Revenue jumped 25%, management revealed on April 29, thanks to a 12% organic sales boost and extra revenue from acquired businesses. Transaction volumes spiked in its DBRS Morningstar division, but tighter credit markets started to pinch the business as stock indexes plunged in late March.

"We successfully transitioned our global workforce to remote work environments," CEO Kunal Kapoor said in a press release, "while delivering our core data research, and ratings without interruption during this period of unprecedented market volatility."

Now what

Kapoor and his team didn't issue specific outlook targets for the fiscal second quarter that began on April 1 and will reflect bigger COVID-19 impacts. But investors should get an updated reading on Morningstar's outlook when the company holds its annual shareholder meeting on Friday, May 15.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Morningstar, Inc. Stock Quote
Morningstar, Inc.
$257.60 (1.61%) $4.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.