Every month, we highlight three of the best buying opportunities from our database. This is an opinion on which stocks will most likely outperform over the next 5 years at today’s prices.

Morningstar is a complex little company with many moving parts. Inevitably, some of them are of higher quality than others.

First, the bad. A healthy portion of Morningstar's revenue comes from businesses that either have no real competitive advantage (wealth management, retirement services), or from workflow products that were historically profitable — albeit with competition — but now carry more disruption risk thanks to AI. As a matter of fact, investors have been selling off anything related to software workflows and financial data, since these are seen as the most commoditisable corners of the market right now.

Now, the good. The workflows and software licenses Morningstar sells are just the surface layer, the interface through which professionals access high-quality data underneath. While some of that data is genuinely commoditised, much of it is Morningstar's own intellectual property: fund data, private markets data, ratings, indices, and more.

There are some headwinds right now. PitchBook, Morningstar's crown jewel of the past few years and the source of most of its growth, has slowed down recently. The culprit? Less activity from venture capital in this economic environment. It's possible this reaccelerates eventually, but for now it looks like the era of low rates and rampant VC dealmaking may be entering a secular downturn.

To counter that, though, some of Morningstar's other businesses are booming. The company's credit ratings segment, which still lags the big three (S&P, Moody's, Fitch) in corporate and government debt, is quietly becoming a major player in private credit. This is an area that's thriving right now, as massive infrastructure buildouts push enterprises toward private loans from firms like Blackstone and Apollo rather than the traditional bank route. It's still a cyclical business, tied to the broader investment cycle, but it looks to be entering a major growth cycle.

On top of that, Morningstar recently became a serious player in indexing after acquiring CRSP earlier in 2026, one of the major index providers in American markets. CRSP is Vanguard's primary index provider, and Vanguard is one of the largest asset managers in the world on the back of its enormous passive investing franchise.

Model assumes 6% revenue growth per year, a cash flow margin of 17%, 40 million shares outstanding at the end of the period, dividend growth of 5%, and a terminal multiple of 20x

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