QS Research · Michael Burry's Scion Capital analyst template · 2006
FEDERAL HOME LOAN MORTGAGE CORP (FMCC)
As of 2026-11-08 · 9/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -43% · downside -55% · upside +33%
The market is not missing the capital stack: TTM net income is $13.41B but only $33.0M reaches common because $13.38B goes to preferred and other claims, leaving a 78.2x P/E and 0.0% common ROE. On the cycle, net income to common averaged $104.5M (FY2020-FY2025), and at the peer P/E range of 11.1x-32.8x that is $1.16B-$3.43B against a $2.58B market cap; my base uses 14.2x = $1.48B, -43%. Downside at 11.1x is -55% and upside at 32.8x is +33%, so the rule does not support a long or a short. The political release optionality is real but not in the base, and today's 78.2x is a residual-common artifact rather than an operating multiple.
Key numbers
- Share price: $3.97
- Market cap: $2.58B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $24.70B
- P/E (TTM): 78.2x
- Price / book: 0.03x
The 15 boxes
- ✓ 1. Long-form business notes
The supplied annual history (fiscal years ended 2020-12-31 through 2025-12-31) is a capital-and-earnings series for a financial company, not a segment-level business description. It shows revenue rising from $16.66B to $23.27B, total equity rising from $16.41B to $70.38B, cash falling from $23.89B to $5.33B, and net income to common staying thin and turning negative in FY2023 and FY2025. The oldest-to-newest annual-report change is visible only through these XBRL aggregates; no TTM, Q3 2026, segment, channel, or unit-economics data is provided.
- ✓ 2. Competitive advantage
FMCC's multifamily franchise has real scale and a policy-linked affordable-housing niche, but the 10-K describes competition on price, service and products against Fannie Mae, FHA, banks, CMBS conduits, debt funds and insurers, not a durable moat. FY2025 multifamily new business rose 17% to $76.4B UPB and the portfolio reached $496B, while segment net revenues fell 17% to $3.412B and the credit provision rose to $532M. Company-wide, net income to common was thin or negative across FY2020-FY2025 even as total equity rose to $70.38B, so the return history does not evidence a durable competitive advantage.
- ✓ 3. 10-Q takeaways
Q3 2026 was a revenue-led quarter: net revenues of $6.8 billion (+19% y/y), net income of $3.2 billion (+17%), and nine-month net income of $10.6 billion (+34%), helped by a $0.9 billion non-interest income line that flipped from a loss a year ago on derivative gains and by non-interest expense down 6%. The offset was credit: a $0.8 billion provision in Q3 2026 versus $0.2 billion in Q3 2025, driven by a Single-Family reserve build from higher projected mortgage rates, with serious delinquency at 0.61% versus 0.57% a year earlier. Volumes were flat-to-soft — Single-Family new business $98 billion (from $99 billion) and Multifamily $16 billion (from $25 billion) — while the mortgage portfolio grew 2% to $3.7 trillion and net worth rose to $81.0 billion.
- ○ 4. Corporate governance
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ○ 6. Other significant filings
- ✓ 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
- ○ 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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