QS Research · Michael Burry's Scion Capital analyst template · 2006
CAPITAL ONE FINANCIAL CORP (COF)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +17% · downside -26% · upside +55%
Base case: 13.5x TTM net income to common of $10.50B (N14) = $141.75B, or +16.7% vs the $121.43B market cap (N9); downside at 8.6x ALLY = $90.3B, -25.6%; upside at 17.9x AXP = $188.0B, +54.8% (S1). That is a watch, not a long: the base case is below the +30% threshold and the reasonable downside is just worse than -25%, even though Q3 2026 credit and Discover synergies are improving. The market is missing that GAAP earnings are depressed by roughly $1.08 per quarter of acquisition and integration items (S96), but at 1.11x book and 9.6% ROE (N26, N24) the stock is not mispriced enough to force a long. A re-rating requires proof that integration costs fall and credit stays benign.
Key numbers
- Share price: $201.87
- Market cap: $121.43B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $63.01B
- P/E (TTM): 11.6x
- Price / book: 1.11x
The 15 boxes
- ✓ 1. Long-form business notes
COF's provided FY2025 and FY2020 excerpts describe a bank holding company centered on credit card and auto lending, including a stated subprime lending strategy, with deposit accounts, cards and networks; the newest excerpt also references the Discover acquisition and Global Payment Network. S24 shows FY2025 revenue of $8.06B, pre-tax income of $2.28B, net income of $2.18B, equity of $113.62B and cash of $62.09B, alongside a jump in diluted shares to 541.30M and equity from FY2024. The sources do not provide segment revenue or unit economics, so these notes are limited to mix, capital/regulatory data and consolidated financials.
- ✓ 2. Competitive advantage
Capital One's own 10-K describes competition as pervasive and undifferentiated: every segment faces bank and non-bank providers, and credit card customers are won largely on price, credit limit, rewards and customer experience. The only durable assets the sources support are scale and a banking licence - revenue of $8.06B and equity of $113.62B in FY2025 versus $5.92B and $60.78B in FY2024, alongside an FHC/BHC charter that constrains entry. But the return history gives no evidence of pricing power: net income fell from $11.96B in FY2021 to $2.18B in FY2025 on rising revenue and rising D&A ($5.26B FY2025 vs $3.24B FY2024), and the 10-K itself says the regulatory framework exists for depositors and system stability, 'rather than for the protection of stockholders and creditors'. Interchange pressure and dependence on network licensees and large merchants put even the payments-network moat at risk.
- ✓ 3. 10-Q takeaways
Q3 2026 10-Q shows total net revenue of $16.3B and net income of $3.5B ($5.61 diluted EPS), with net interest income up $482M and non-interest income up $503M YoY. Purchase volume rose 11% and Global Payment Network volume rose 25% in Q3 2026. Credit improved (net charge-off rate 2.73%, down 43 bps; 30+ day delinquency 3.41%, down 18 bps from Dec 31 2025), while non-interest expense rose $593M on card growth, Brex, technology and marketing. Capital return was active ($2.6B Q3 2026 buybacks, $491M dividends) with CET1 at 13.8%; first-nine-month net income of $8.7B vs $319M includes a lower provision from absence of the initial Discover allowance.
- ✓ 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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