QS Research · Michael Burry's Scion Capital analyst template · 2006
Fermi Inc. (FRMI)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -1% · downside -49% · upside +54%
At $1.57 the market pays 0.97x the $1.03B book (N19, N16), about $1.56/share on 640.47M shares (N4), so the base case is roughly flat and there is no asset discount. The 0.5x-book downside is $0.80, -49% from $1.57, if the $1.16B TTM capex (N10) against $62.5M cash (N12) forces a dilutive raise; the 1.5x-book upside is $2.41, +54%, only if the August 2026 TensorWave lease (S27) and the ~200 MW / ~1.5 GW power targets (S100) turn capex into EBITDA. I have rerated the book multiple only around those dated catalysts and the Q2 2026 going-concern filing (S27), but the -49%/+54% skew is roughly 1:1 and today's price sits between the cases. The business is still pre-revenue with TTM EBIT -$365.1M (N7), net income to common -$737.9M (N8) and FCF -$1.24B (N11), so the equity is a binary financing and execution option, not a long or short under the rule.
Key numbers
- Share price: $1.57
- Market cap: $1.01B
- Latest financial period: TTM to Jun 30, 2026
- Price / book: 0.97x
The 15 boxes
- ✓ 1. Long-form business notes
Fermi is a pre-revenue, development-stage REIT candidate formed in January 2025 to build Project Matador, a powered AI campus in the Texas Panhandle leased from Texas Tech; it expects to earn rent from long-term tenants based on reserved power capacity, invested capital, pass-throughs and fees, not from power sales. FY2025 results are still development spending: operating income -$177.8M, net income to common -$529.8M, operating cash flow -$34.2M and capex $569.3M, with $408.5M cash at 2025-12-31. Revenue depends on definitive leases, permits, energization and financing; the sources give no segment revenue or actual $/kW lease rates, and only FY2025 annual data for comparison.
- ✓ 2. Competitive advantage
No durable competitive advantage is demonstrated: FRMI is a development-stage company with no revenue to date, no binding tenant contracts, and first revenue expected in the first half of 2027. FY2025 XBRL shows operating income of -$177.8M and operating cash flow of -$34.2M, so there is no margin or return history supporting an advantage. The only asset-level differentiators in the sources are the Project Matador air permit (TCEQ approved up to ~6 GW on Feb 25 2026; application filed Mar 27 2026 for an incremental 5 GW) and the Texas Tech leasehold, while FRMI competes with much larger data-center, utility, independent power producer and technology companies on speed to power, permits, equipment and pricing.
- ✓ 3. 10-Q takeaways
Q2 2026 (quarter ended June 30, 2026) was still pre-revenue: no sales, G&A of $26.8M and a net loss of $25.8M versus a $6.3M net loss in Q2 2025; the $214.5M six-month net loss to June 30, 2026 carries a $24.8M non-cash Macquarie term-loan extinguishment charge recorded in the six-month period, not in the quarter. Cash of $62.5M plus restricted cash of $29.2M ($91.7M total per the release) sat against a going-concern disclosure that management concluded its plans alleviate, and the balance sheet changed materially after quarter-end with $431.3M of 5.00% convertibles (net proceeds ~$416.8M) issued in July 2026 and $520.1M of debt outstanding at June 30, 2026. Neither the 10-Q nor the Q2 release gives numeric revenue or earnings guidance; the only targets are operational (about 200 MW of initial commercial power in six months, about 1.5 GW in 18 to 24 months, subject to binding customer agreements).
- ✓ 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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