QS Research · Michael Burry's Scion Capital analyst template · 2006
Core Scientific, Inc./tx (CORZ)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -68% · upside +45%
Core Scientific is not missing the operating inflection — Q3 2026 colocation revenue was $215.4M, 93% of revenue, and Adjusted EBITDA $133.6M at a 57% margin — but the market is not yet paying for a durable cash-flow bridge: TTM EBIT is -$434.0M (N11) and TTM FCF is -$1.32B (N17), against a FY2022-FY2025 average FCF of about -$158M (S2). With no positive earnings or cycle-average cash flow to capitalize and negative book equity of -$1.09B (N21), the only usable base is Section 13's TTM revenue of $592.1M (N9); at today's 6.40x P/S (N22) the base case is 6.40x × $592.1M ÷ 322.24M (N5) = $11.76 (0%), the peer-low 2.06x gives $3.79 (-68%), and the peer-high 9.28x gives $17.05 (+45%). That is a wide but unconvincing risk/reward because the base case is flat and the downside is far beyond the -25% long limit. The dated catalysts — the 2026-11-05 Q3 10-Q/8-K, the 2026-07-28 AMD/Neocloud disclosure and the 2026-08-18 director purchase — are real, but they have not yet put the company on positive operating cash flow after capex.
Key numbers
- Share price: $11.76
- Market cap: $3.79B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $592.1M
The 15 boxes
- ✓ 1. Long-form business notes
Core Scientific is a data-center operator that historically earned most revenue from bitcoin self-mining and third-party hosting and is now converting capacity to high-density colocation for AI/HPC. The FY2025 10-K reports three segments, ten data centers, about 1.4 GW gross utility capacity and 920 MW leasable customer power, with 2025 revenue still majority self-mining and CoreWeave contracts totaling about 590 MW. The FY2021 10-K shows six operational data centers and about 457 MW, with revenue historically from hosting fees and miner resale; XBRL shows FY2025 revenue of $319.0M, operating income of -$245.6M and net income to common of -$280.7M, with operating cash flow of $278.2M against $729.0M capex. Sources do not provide Q3 2026, nine-month 2026 or TTM figures.
- ✓ 2. Competitive advantage
No durable advantage is visible in the numbers: revenue fell from $510.7M in FY2024 to $319.0M in FY2025, gross profit from $121.1M to $37.9M, and operating income worsened from -$142.1M to -$245.6M, with negative total equity in every year from FY2022 through FY2025. The only scale asset is contracted power (1,426 MW gross utility capacity, 590 MW leased at Dec 31, 2025), but leased capacity is dedicated to a single customer, CoreWeave, which the 10-K says is 100% of Colocation segment revenue. Management itself frames competition as won on low-cost power, scale, fleet efficiency and capital availability - commodity inputs, not brand, network or switching costs - and the FY2025 10-K rewrote or newly added 1020 risk-factor paragraphs around that transition and customer concentration.
- ✓ 3. 10-Q takeaways
Q3 2026 shows the colocation transition driving the P&L: revenue rose to $232.9M from $81.1M in Q3 2025, with colocation $215.4M and 93% of total. Reported net income of $1.178B is not operating profitability; it is primarily a $1.034B favorable warrant fair-value swing, while the nine-month net loss was $324.4M after a $266.5M Q1 2026 impairment. Company-reported Adjusted EBITDA was $133.6M at a 57% margin, cash fell to $803.9M from $1.769B at Q2 2026 as Q3 capex ran $985.1M, and contracted capacity is 1,120 MW versus 485 MW billable, still concentrated in CoreWeave.
- ✓ 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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