QS Research · Michael Burry's Scion Capital analyst template · 2006
BlackRock, Inc. (BLK)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -15% · upside +18%
BlackRock's fee engine is accelerating - Q3 2026 revenue $7,752M (+19%), as adjusted operating margin 47.8%, 11% annualized organic base fee growth and record $15.49T AUM (S102, S79) - but at 26.4x TTM net income of $6.91B (N22, N12) the price already pays for the next year of growth: on today's multiple the base case is 6.91 x 26.4 = $182.4B, essentially the $182.64B market cap (N6), and my +18% upside case is nothing but TTM earnings growing 18% to $8.14B while the multiple holds at 26.4x (8.14 x 26.4 = $215.0B). The bear side is the multiple itself: BLK's 26.4x sits above every profitable peer shown - BEN 22.8x, MS 14.3x, NTRS 13.1x, TROW 10.9x, AMP 10.5x (S1) - on an 11.9% ROE and 3.14x book (N20, N23), and the Q3 beat leaned partly on nonoperating investment gains of $353M versus $64M a year earlier while excluding a $564M noncash contingent-consideration charge (S102). Nothing is broken here - record flows, $550M of quarterly buybacks, a $15.49T platform - but nothing is mispriced either, and with the cases straddling the price (base -0.1%, downside -15.1%, upside +17.7%) the rule gives a watch rather than a long or a short. I would need either a price nearer the 22.8x peer ceiling or evidence that double-digit organic base fee growth survives an industry ranked #193 (S59, S60) before committing capital.
Key numbers
- Share price: $1,178.87
- Market cap: $182.64B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $28.54B
- P/E (TTM): 26.4x
- Price / book: 3.14x
The 15 boxes
- ✓ 1. Long-form business notes
BlackRock is a fee-on-assets manager: $14.0 trillion of AUM at December 31, 2025 (10% five-year CAGR), about 24,900 employees, and FY2025 total revenue of $24,216 million versus $20,407 million in FY2024. The mix matters more than the total: ETFs were 42% of long-term AUM but 45% of long-term base fees and securities lending revenue, retail was 10% of long-term AUM but 25% of fees, and institutional index was 29% of AUM but only 6% of fees. Between the FY2024 10-K and the FY2025 10-K the business shifted toward private markets (HPS closed July 1, 2025; GIP October 2024; AUM presentation recast in Q1 2025) and the share count rose with Subco units. GAAP operating income fell to $7,045 million (29.1% margin) in FY2025 from $7,574 million (37.1%), while as-adjusted operating income rose to $9,600 million at a 44.1% margin.
- ✓ 2. Competitive advantage
The sources show a global asset manager with investment-performance, brand and Aladdin technology credentials, but no explicit durable moat; competition is broad and contracts can be terminated or repriced. FY2025 revenue rose to $24.22B from $20.41B in FY2024, while operating income fell to $7.04B from $7.57B and net income to $5.55B from $6.37B. The 10-K warns increased competition may cause fee reductions and lower AUM, revenue and earnings.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue was $7.752B, up 19% year over year, on $205B of quarterly net inflows and $15.488T AUM at Sep 30 2026. GAAP operating margin was 30.0% and as adjusted 47.8%; GAAP EPS was $10.57 and as adjusted $15.93, with noncash contingent-consideration and investment gains kept out of adjusted results. The quarter included $550M of buybacks; the 10-Q and earnings release give no numeric guidance, and the 10-Q risk-factor section points back to the 2025 10-K.
- ✓ 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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