QS Research · Michael Burry's Scion Capital analyst template · 2006
DANAHER CORP /DE/ (DHR)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -21% · downside -49% · upside +2%
At $230.25 and a $161.99B market cap, DHR trades at 30.8x TTM EV/EBITDA and 37.4x TTM P/E on $184.88B EV, so the market is still paying a high-multiple price for a cyclical business. Using section 13's one base—cycle-normalized EBITDA of $6.18B (cycle EBIT $5.48B + D&A $0.69B)—the 24.7x midpoint gives EV $152.5B, less $24.20B net debt plus leases gives equity $128.3B, -21% vs the $161.99B market cap; 17.2x gives -49% and 30.8x gives +2.5%. TTM EBIT of $5.22B and FCF of $5.73B are only modestly below the $5.48B/$6.05B cycle averages, so the call is driven by the multiple, not by a big normalized-earnings uplift. Masimo adds about $1.5B of 2025 revenue but consumed about $9.8B of cash and leaves $28.58B debt against $5.68B cash, while respiratory testing fell from $500M to $350M and adjusted EPS carries a $1.9B FY2026 intangible-amortization gap. With base -21%, downside -49% and upside +2.5%, the short rule is not met (base is not ≤-30%), so this is a watch, not a short.
Key numbers
- Share price: $230.25
- Market cap: $161.99B
- Latest financial period: TTM to Sep 25, 2026
- Revenue (TTM): $25.61B
- EV / EBITDA (TTM): 30.8x
- P/E (TTM): 37.4x
- Price / book: 3.02x
The 15 boxes
- ✓ 1. Long-form business notes
Danaher is a global healthcare and medical-products seller in the provided sources, but the sources give only company-wide financials and risk factors, not segment revenue, channel mix, or unit economics. Revenue was $26.64B in FY2022, fell to $23.89B in FY2023, and was $24.57B in FY2025; operating income fell from $7.54B to $4.69B and operating cash flow from $8.52B to $6.42B over FY2022-FY2025. Between the FY2020 and FY2025 10-Ks, the disclosed portfolio changed via Fortive/Envista/Veralto dispositions and a pending Masimo deal, while non-U.S. sales were 61% in FY2020 and 59% in FY2025.
- ✓ 2. Competitive advantage
The sources support a real but contested advantage: management claims leadership positions in many markets and points to DBS, recurring revenue, direct sales, brands and scale, but the 10-K says aggregate competitive position cannot be determined and flags intense competition and price pressure. Margins remain high but have compressed: FY2025 gross margin was 59.1% and operating margin 19.1%, versus a FY2022 operating margin of 28.3%.
- ✓ 3. 10-Q takeaways
Q3 2026 sales rose 8.5% reported and 3.0% core, or 5.5% core excluding respiratory testing; 9M 2026 sales rose 6.0% reported and 2.0% core. Q3 operating margin was 19.0%, down 10 bps, while 9M margin was 19.8%, up 180 bps, with the 9M gain helped by lower 2025 impairments and tariff refunds. Reported net earnings included a $263M discrete tax benefit in 2026 and were compared against 2025 impairment charges, so they are not clean operating earnings. Masimo closed on 2026-06-10 for about $9.8B and added debt and integration risk; the excerpt did not show inventory, cash, buybacks or formal guidance.
- ✓ 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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