QS Research · Michael Burry's Scion Capital analyst template · 2006
WELLTOWER INC. (WELL)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -42% · downside -52% · upside +29%
Welltower is an excellent operator in a genuine demographic tailwind — Q3 2026 SHO SSNOI +21.0%, normalized FFO +24.6% YoY and raised FY2026 FFO guidance to $6.47-$6.53 (S31) — but the market already pays 14.26x EV/Sales and 107.8x TTM P/E for it (N22, N24), the highest sales multiple in the peer table (S1). On the company's own multiple the base case is today's price, and the peer-anchored cases run from -52.3% (DOC 7.45x) through -42.5% (VTR 8.72x) to +29.3% only by importing AHR's 139.2x P/E, a far less similar peer (S1). The business is not broken — leverage is 3.02x net debt/Adjusted EBITDA with ~$9.5B liquidity (S31) and the dividend was just raised 15% (S31) — so this is not a short; it is a valuation that has run ahead of the earnings base, and the rule (base +30% with downside no worse than -25%) is not met. I pass on new money at $245.01 and watch for either a lower price or earnings catching up to the multiple.
Key numbers
- Share price: $245.01
- Market cap: $179.74B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $13.79B
- P/E (TTM): 107.8x
- Price / book: 3.70x
The 15 boxes
- ✓ 1. Long-form business notes
Welltower is a REIT focused on seniors and wellness housing in the U.S., U.K. and Canada, with 2,500+ communities and three reportable segments: Seniors Housing Operating, Triple-net and Outpatient Medical. FY2025 revenue was heavily weighted to Seniors Housing Operating at 78%, versus 11% Triple-net and 7% Outpatient Medical. It earns through operating partnerships, triple-net master leases and outpatient medical leases, and also carries a loan and investment book. The XBRL history shows large balance-sheet and share-count growth from FY2020 to FY2025, while the oldest Item 1 excerpt provided is regulatory-heavy and the latest adds data science/AI/WBS operating detail.
- ✓ 2. Competitive advantage
Welltower's advantage is scale and capital access, not a brand or visible switching cost: a portfolio of over 2,500 properties feeds a proprietary data-science underwriting engine, and its WBS shared-services platform is pushed out into operating partners. Competition is wide (other REITs, private equity and hedge funds, banks, insurers, GSEs, bond funds, operators, developers) and is decided on relationships, certainty of execution, structures and underwriting criteria, with cost of capital explicitly a driver; state CON and licensure rules fence off some new supply. The record shows scale-up, not fat margins: revenue went from $3.20B (FY2021) to $8.45B (FY2025) while D&A rose from $1.04B to $2.08B, and net income to common of $936.8M (FY2025) sits against $42.13B of total equity, with diluted shares up from 417.39M (FY2020) to 679.52M (FY2025) — growth was partly bought with equity.
- ✓ 3. 10-Q takeaways
Q3 2026 was an operating beat with raised guidance: total portfolio SSNOI +15.8% (SHO +21.0%) drove net income of $414.8 million and NOI of $1.47 billion for the quarter, with normalized FFO of $1.67 per diluted share (+24.6%). The company is deploying capital aggressively — 228 properties bought for $10.7 billion at a 5.8% cap rate in the nine months to September 2026, plus ~$7 billion of seniors housing announced in October — funded by $7.6 billion of ATM equity and C$1.15 billion of new Canadian notes, leaving $2.27 billion of cash and $5.21 billion of revolver capacity. Leverage rose with the program (net debt to book capitalization 26% from 20% a year earlier) while coverage improved (interest coverage 7.07x from 6.21x); the 10-Q reports no material change in risk factors.
- ✓ 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.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.