S&P Global (NYSE:SPGI) shares have plunged due to the so-called “SaaS-pocalypse” sell-off that hit software-as-a-service stocks hard. That was followed by another sharp drop after the global ratings and index provider’s fourth-quarter earnings report. While it beat revenue expectations, guidance for 2026 came in below forecasts. Still, the company showed solid growth across segments and strong cash flow.
Even so, S&P Global has tumbled 25% in the past month, hitting a 52-week low of $381.61 per share before bouncing back over the past two trading days. Yet, with more than 50 years of dividend increases, is this a buy-the-dip opportunity for a business with strong data advantages and reliable returns, or is there more room to fall?
Solid Earnings in Tough Conditions
The company runs four main segments:
- Global Ratings: Provides key credit ratings for financial markets.
- Dow Jones Indices: Manages benchmarks like the S&P 500, tied to trillions in assets.
- S&P Global Market Intelligence: Supplies data and analytics for investors.
- Global Commodity Insights and Engineering Solutions: Offers specialized energy and commodities data.
S&P Global’s revenue hit $3.92 billion, up 9% year-over-year and above the $3.91 billion expected. Non-GAAP earnings rose 14% to $4.30 per share, just shy of the $4.32 per share forecast. Adjusted full-year 2025 EPS reached $17.83.
Importantly, all business segments expanded margins and grew revenue at upper single-digit rates. This shows the company’s core operations remain resilient despite economic uncertainty and negative investor mood.
S&P’s gross margin has stayed around 69% to 70% for a decade, showing pricing power and cost control. Last year’s free cash flow margin hit 39%, meaning it threw off nearly $39 in cash for every $100 it made in revenue — greater than the year-ago period thanks to higher sales and efficiency.
This cash powers dividends, investments, and possible buybacks, strengthening the balance sheet and creating long-term value.
As a Dividend King, S&P Global has raised payouts for over 50 consecutive years. The current yield is about 0.92%, with a 10-year dividend growth rate of 10.3%. Last year’s smaller hike was related to a planned business spinoff to simplify its operations. Still, the dividend stays well-covered by earnings and cash flow, making it dependable even in volatile markets.
Guidance was the weak spot: S&P Global expects adjusted earnings of $19.40 to $19.65 per share — below the $19.96 per share consensus — and projected revenue growth of 6.6% to 8.6%, which was also under expectations and below 2025’s 8% pace.
This cautious outlook, combined with broader selling in software stocks since late 2025 — driven by AI competition fears — amplified the market’s reaction. S&P Global is now down 24% over the past year and almost 22% year-to-date.
Not Your Average SaaS Company
However, unlike standard software firms at risk from AI, S&P Global owns unique, hard-to-replicate data assets — proprietary credit records, exclusive indices, and vast financial datasets. AI can’t easily replace these.
In fact, AI can help: it may increase demand for licensed data and improve internal efficiency. Credit ratings become even more vital in uncertain times. This deep “data moat” sets it apart from easily copied SaaS players, and its stock now trades at an attractive valuation.
Shares go for less than 21x estimates — the lowest in five years and far below its 30x average. This reflects a dour market sentiment, not weaker business performance. Earnings still grow 11% to 12% annually.
Analysts’ average price target is $576 per share, implying 40% upside. The consensus had been as high as $615 per share a month ago, but targets were lowered after the earnings report.
Key Takeaways
S&P Global isn’t just another software stock — its strength lies in irreplaceable data ownership and durable moats in ratings and indices. AI is more of a boost than a threat.
The stock price drop to near $382 — a level not seen since 2023 — stems from short-term guidance worries and sector pressure, not core weakness. For long-term investors, this offers a chance to buy a high-quality company at a discount.
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