QS Research · Michael Burry's Scion Capital analyst template · 2006
Constellation Energy Corp (CEG)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case none · downside -14% · upside +51%
Using the TTM to Jun 30 2026 base — revenue $31.27B, EBITDA $8.27B and net income $3.46B (N8-N13) — today's quoted 12.9x EV/EBITDA on $8.27B gives EV $106.97B (N24), and after $18.41B net debt (N22) and 354.31M shares (N5) the $249.95 price (N1) is the base case, 0%. Downside to the 11.4x peer-low EV/EBITDA is 11.4 x $8.27B = $94.28B EV, less $18.41B = $75.87B equity, / 354.31M = $214.13, or -14.3%; upside to 18.4x is 18.4 x $8.27B = $152.17B EV, less $18.41B = $133.76B equity, / 354.31M = $377.51, or +51.0%. The raised FY2026 adjusted operating EPS guidance to $11.50-$12.50 and the Crane/PPA catalysts could justify the high end, but at 25.6x TTM P/E and a 0.3% FCF yield the market is not paying for that yet. The stock is interesting after a 34.4% drawdown, but the base case is not +30% and the cash conversion is too thin for a long; this is a watch, not a long.
Key numbers
- Share price: $249.95
- Market cap: $88.56B
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $31.27B
- EV / EBITDA (TTM): 12.9x
- P/E (TTM): 25.6x
- Price / book: 2.77x
The 15 boxes
- ✓ 1. Long-form business notes
CEG in these filings is a competitive generator-and-retail power business: it earns money running nuclear (and hydro) baseload plants, sells output under procurement contracts or into wholesale markets when uncontracted, and uses its retail book to hedge generation, with roughly 70% of generating resources in PJM. Between the FY2021 10-K and the latest 10-K the business changed most through the January 2026 Calpine acquisition (gas, geothermal Geysers assets, CCUS studies, expected goodwill) and through the new nuclear PTC from the IRA starting January 1, 2024, affirmed by the OBBBA. Reported revenue ran $17.25B FY2021 to $22.66B FY2025, but FY2025 operating income of $3.09B and net income of $2.32B were below FY2024's $4.35B and $3.75B, while operating cash flow turned positive at $4.24B after four negative years. No FY2026 or quarterly figures appear in these sources.
- ○ 2. Competitive advantage
CEG's advantage rests on physical assets and licences, not on pricing power: it claims the largest private-sector power fleet in the world after the Calpine merger, with 22 GW of emissions-free capacity at 25 nuclear units and a 94.7% nuclear capacity factor in 2025, and the lowest carbon intensity among the ten largest U.S. generators. The margin record does not corroborate a durable moat: FY2025 revenue rose to $22.66B from $18.96B in FY2024 while operating income fell to $3.09B from $4.35B, and FY2021 produced an operating loss of $346.0M. What protects the franchise is regulatory and contractual — NRC licences, state ZEC/CMC payments (New York extended to 2049), the federal nuclear PTC, and PPAs with Microsoft and Meta — while FERC retains authority to suspend market-based rates and PJM is weighing market rule changes.
- ✓ 3. 10-Q takeaways
The Q2 2026 10-Q (quarter ended 2026-06-30) shows revenue up 23.0% to $7,504 million, but GAAP net income attributable to common shareholders fell to $513 million/$1.42 per share while Adjusted (non-GAAP) Operating Earnings rose to $920 million/$2.55 per share. Liquidity at June 30, 2026 was $0.7 billion cash and $7.0 billion available credit capacity; the same-quarter earnings release raised full-year Adjusted (non-GAAP) Operating Earnings guidance to $11.50–$12.50 per share. The 10-Q risk-factor update focuses on ratings and collateral, not a computed 10-Q risk-factor diff.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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