QS Research · Michael Burry's Scion Capital analyst template · 2006
Constellation Energy Corp (CEG)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -23% · upside +22%
The market is not missing the operating recovery: TTM to Jun 30 2026 EBIT is $4.60B, EBITDA $8.27B and net income $3.46B, above FY2025, and FY2026 adjusted EPS guidance was raised to $11.50-$12.50. What it is doing is refusing to pay a premium utility multiple for merchant cash flow: at $249.95 CEG is 25.6x TTM P/E, 12.9x EV/EBITDA and 0.3% FCF yield, with $2.52B of TTM buybacks/dividends versus $309.0M FCF and $19.11B debt. Base case at 12.9x $8.27B EBITDA is $106.97B EV and $88.56B equity, 0% vs price; 10.5x gives about $192 (-23%) and 15.4x gives about $306 (+22%), roughly 1:1 reward/risk. No cycle-average normalization is used; all three cases use TTM to Jun 30 2026. Verdict pass: the sector de-rating is real, but there is no margin of safety and the long/short rule is not met.
Key numbers
- Share price: $249.95
- Market cap: $88.56B
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $31.27B
- EV / EBITDA (TTM): 12.9x
- P/E (TTM): 25.6x
- Price / book: 2.77x
The 15 boxes
- ✓ 1. Long-form business notes
CEG's revenue engine in the sources is a generating fleet sold through PPAs and merchant spot markets, plus competitive retail supply to C&I, government and residential customers; approximately 70% of generating resources sit in PJM. FY2025 revenue was $22.66B, operating income $3.09B, net income $2.32B, operating cash flow $4.24B and capex $2.95B. The FY2021-to-FY2025 XBRL shows revenue rising from $17.25B to $22.66B while operating income and operating cash flow swung sharply. The latest 10-K adds the January 2026 Calpine acquisition and the IRA/OBBBA nuclear PTC; the sources do not provide segment-level revenue or margin detail.
- ○ 2. Competitive advantage
CEG's claimed moat is scale plus 25 nuclear units (22 GW, 183 TWh in 2025, 94.7% capacity factor), licences it intends to extend to 80 years, and state/federal policy support (ZEC/CMC programs, nuclear PTC) that management says states cannot meet their goals without. The financial record does not yet confirm durable margins: operating income was -$346.0M in FY2021 and only turned materially positive in FY2023 ($1.61B), $4.35B in FY2024 and $3.09B in FY2025, and operating cash flow was negative in every year FY2021-FY2024 before +$4.24B in FY2025. These sources name no competitors, give no margin percentages or returns, and show the advantage is licence- and policy-contingent.
- ✓ 3. 10-Q takeaways
Q2 2026 revenue was $7,504M, up 23.0% from $6,101M, but GAAP net income attributable to common shareholders fell to $513M from $839M; adjusted operating earnings rose to $920M from $599M, so the GAAP quarter carried large unrealized fair-value and Calpine-related items. Six-month revenue was $18,626M, up 44.5%, with adjusted operating earnings of $1,893M versus $1,272M. Liquidity was $7.0B of credit capacity plus $0.7B cash at June 30, 2026; the key 10-Q items are Calpine integration/divestitures, PJM capacity outcomes, data-center/PPA contracts, nuclear outages and fuel/regulatory risks.
- ✓ 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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