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QS Research · Michael Burry's Scion Capital analyst template · 2006

HALLIBURTON CO (HAL)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: PASS

Conviction low · base case -3% · downside -34% · upside +18%

Using the Section 13 cyclical base, normalized EBITDA is $3.06B (avg FY2020–FY2025 EBIT $2.04B + $1.02B D&A), well below TTM EBITDA of $4.00B. At the 11x closest-peer multiple, EV is $33.66B; subtracting $5.32B net debt and dividing by 827.13M shares gives about $34.3, essentially today's $35.34. The 8x downside is $23.2 (-34.4%) and the 13x upside is $41.7 (+18.0%), so no scenario meets the long/short threshold. Current price already prices in a re-rating to the upper end of oil-service comps, leaving no margin of safety on normalized earnings. Verdict: pass.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Halliburton makes money through two operating segments: Completion and Production (cementing, stimulation, artificial lift, completions, specialty chemicals) and Drilling and Evaluation (drilling fluids, bits, directional drilling, wireline, software). FY2025 revenue was $22.18 billion, down 3% from FY2024, with international down 2% and North America down 6%; the two segments posted FY2025 operating margins of 17% and 15%, respectively. From FY2020 to FY2025, revenue rose from $14.45 billion to $22.18 billion, the workforce grew from about 40,000 to over 46,000, and the specialty chemicals business shifted from Baroid to a separate Multi-Chem product line now partly for sale. Cash generation remains strong: FY2025 operating cash flow was $2.93 billion and the company returned $1.6 billion to shareholders.

  2. ✓ 2. Competitive advantage

    Halliburton has no durable competitive advantage. It is one of the world’s largest diversified energy services companies, but its markets are highly competitive with many substantial competitors; price, service quality, and technical proficiency drive sales, and no particular patent is material. No customer exceeds 10% of revenue, raw materials are normally readily available, and financial results swing with the oilfield cycle—operating loss in FY2020, peak operating income in FY2023, then decline in FY2025. Scale and geographic diversification provide some resilience but not pricing power or stable returns.

  3. ✓ 3. 10-Q takeaways

    In Q3 2026, Halliburton's total revenue rose 2% YoY to $5.7 billion, as a 10% increase in Drilling and Evaluation offset a 4% decline in Completion and Production. Reported operating income was $624 million, including a $107 million impairment charge, versus $356 million (including $392 million impairments) a year ago. Cash was $1.8 billion at quarter-end, and the company repurchased shares and paid dividends while maintaining 2026 capex guidance of about $1.1 billion. Key risks include Middle East geopolitical disruptions, inflationary cost pressures, tariffs, and a potential $640 million IRS tax adjustment.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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