QS Research · Michael Burry's Scion Capital analyst template · 2006
COCA COLA CO (KO)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -30% · downside -47% · upside +11%
Section 13 anchors its mid-case on TTM EBITDA, but in a cyclical mode TTM EBITDA of $16.36B is 35% above the FY2020-FY2025 average of $12.13B, so I use normalized net income of $10.25B as the base and keep TTM and the raised 11% EPS guidance as the upside. At today's 28.1x P/E, normalized net income gives $66.95 (-30.0%), FY2020 net income of $7.75B gives $50.62 (-47.1%), and TTM net income grown by the 2026 11% EPS guidance gives $106.1 (+10.9%). The market is paying a premium quality multiple on peak-ish earnings: Q3 2026 was strong, but price/mix was only +1% and TTM FCF is 74% above the six-year average. That supports a short, but only at the rule's threshold and with medium conviction because the franchise and dividend are real.
Key numbers
- Share price: $95.67
- Market cap: $411.56B
- Latest financial period: TTM to Oct 2, 2026
- Revenue (TTM): $51.05B
- EV / EBITDA (TTM): 26.9x
- P/E (TTM): 28.1x
- Price / book: 11.01x
The 15 boxes
- ✓ 1. Long-form business notes
KO's provided filings show a concentrate and syrup supplier to independent bottling partners, with one FY2025 bottler at 10% of net operating revenues and with a continuing refranchising effort around consolidated bottling. The newest 10-K also describes US alcohol through a wholly owned, indirect, firewalled subsidiary using third-party manufacturers and distributors. From FY2020 to FY2025 XBRL, revenue rose from $33.01B to $47.94B and reported net income from $7.75B to $13.11B, while operating cash flow fell from $9.84B to $7.41B and capex rose from $1.18B to $2.11B. The oldest report here is FY2020 and the newest FY2025; the sources do not give full segment economics, unit volumes, channel mix, or FY2016-FY2019 figures.
- ✓ 2. Competitive advantage
The advantage is scale plus brand plus bottler contracts: trademarks reach 2.2 billion of an estimated 65 billion beverage servings consumed daily, products sell in more than 200 countries and territories, and the system moved 33.8 billion unit cases in 2025. The margin record backs it up — gross margin held in a ~58%–62% band every year FY2020–FY2025 and operating income rose from $9.00B (FY2020) to $13.76B (FY2025), though FY2024 fell to $9.99B and operating cash flow ($7.41B FY2025) sat well below net income ($13.11B). The moat is partly contractual: bottlers must buy their entire concentrate/syrup requirement from the Company, and in most markets the Company refrains from authorizing third parties in the bottler's territory. Competition is broad — PepsiCo is named a primary competitor in many countries, alongside Nestlé, Keurig Dr Pepper, Danone, Red Bull, private label and direct-to-consumer microbrands — and the portfolio is concentrated in sparkling, 69% of 2025 unit case volume.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended Oct 2, 2026) showed 7% reported and organic revenue growth to $13.38B, 5% unit case growth, and operating margin expansion to 33.4% from 32.0%; nine-month revenue rose 9% to $39.23B. Gross margin improved, operating income rose 12% in Q3 and 13% in the nine months, while other operating charges fell sharply. Cash flow was strong ($12.5B YTD CFO, $11.4B FCF), inventory was flat, and the available computed risk-factor diff for the FY2025 10-K flags 10 new/rewritten paragraphs; the excerpt does not give explicit buyback amounts or full numeric guidance ranges.
- ✓ 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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