QS Research · Michael Burry's Scion Capital analyst template · 2006
KKR & Co. Inc. (KKR)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -16% · downside -30% · upside +3%
The market is paying for TTM, not for the cycle: at $96.48 the cap is $86.60B, which is 29.0x TTM net income to common of $2.99B (N23) and 2.79x the $31.05B of book for a 9.6% ROE (N24, N21), and that price requires $2.99B of earnings to be the permanent level - 20% above the $2.50B that FY2020-FY2025 actually averaged. Priced at KKR's own 29.0x, mid-cycle earnings of $2.50B give $72.5B of cap, or $80.8/share (-16%); a cycle excluding the FY2021 peak (average $2.07B) gives $60.2B, $67.0/share (-31%); and only a repeat of FY2024's $3.08B reaches $89.3B, $99.5/share (+3%) - I use 29.0x in all three cases because no dated filing, guidance or balance-sheet event justifies another multiple, which is why I drop Section 13's Carlyle-based +36% upside. The fee engine is real (Q2 2026 FRE $1,214.1M, +37% YoY, on $796B of AUM), but GAAP net income to common fell from $3.08B in FY2024 to $2.25B in FY2025 with the swing in investment income, and revenue has already fallen 65% once, from $16.23B in FY2021 to $5.70B in FY2022. The informed money is split rather than confirming - founders sold $414.2M at $119.80-$144.25 while the Co-CEOs and four directors bought at $87.81-$104.93. Negative asymmetry, but a -16% base case is not enough to short and 29x on a 9.6% ROE is not cheap enough to own: watch.
Key numbers
- Share price: $96.48
- Market cap: $86.60B
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $21.31B
- P/E (TTM): 29.0x
- Price / book: 2.79x
The 15 boxes
- ✓ 1. Long-form business notes
KKR is a fee- and carry-driven alternative asset manager plus an insurance business; the FY2020 filing gives four asset-management lines and $148.7B Private Markets AUM, while the 2026 excerpt focuses on Asset Management fee/carry mechanics, insurance volatility and perpetual-capital/redemption risk without updated segment AUM. S24 shows a violent cycle: revenue $16.23B FY2021 to $5.70B FY2022 and back to $19.46B FY2025, with pretax income $13.85B to -$292.2M to $7.10B. Cash flow is also cyclical, with operating cash flow negative FY2020-FY2023 and positive FY2024-FY2025.
- ✓ 2. Competitive advantage
KKR's 10-K describes an intensely competitive, multi-factor business with no single protected moat: competition turns on investment performance, relationships, pricing and fund terms, and the rival set includes other asset managers, investment banks, commercial finance companies, strategic buyers and insurers. The advantage the sources show is contestable: key-person relationships and a larger balance sheet than most asset-management competitors, but both come with explicit retention and balance-sheet risk. The FY2020-FY2025 record is volatile: revenue ranged from $4.23B to $21.88B, pretax income from $13.85B to -$292.2M, and net income to common from $4.63B to -$590.7M, so the sources do not show a steady-margin franchise.
- ✓ 3. 10-Q takeaways
Q2 2026 (quarter ended June 30, 2026) total revenues rose to $5,725,891 thousand from $5,088,843 thousand a year earlier, but income before taxes fell to $1,373,984 thousand from $1,528,768 thousand as insurance net policy benefits and claims rose $516,817 thousand. The fee engine set records: Fee Related Earnings $1,214,148 thousand, Total Operating Earnings $1,539,404 thousand, Adjusted Net Income $1,492,694 thousand, with AUM of $796 billion (+16% year-over-year) and $34 billion of new capital raised in the quarter. Insurance new business volumes fell hard in the institutional channel ($1,224 million vs $3,819 million), and the 10-Q reports no material risk-factor changes beyond its Business Environment section; neither the 10-Q nor the earnings release gives numeric 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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