QS Research · Michael Burry's Scion Capital analyst template · 2006
WELLTOWER INC. (WELL)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -17% · downside -40% · upside +35%
Section 13's EV/Sales base is not ideal for a loan book, but I keep it so all cases share one base: TTM revenue of $13.79B. Base case at 12.0x EV/Sales: 12.0 x $13.79B = $165.5B EV; less $16.93B net debt = $148.5B equity; divided by 733.61M shares = about $202.5, or -17.3% from $245.01. The operating story is real, with Q3 2026 normalized FFO +24.6%, SHO SSNOI +21.0%, occupancy at 90.2% and guidance raised to $6.50, but the market already pays 14.26x sales and 107.8x GAAP P/E versus a 9.09x peer median. Downside to that median is about -40% while upside to the most expensive peer at 18.77x is only about +35%, so the long rule fails on downside and the short rule fails on upside; this is a watch, not a position.
Key numbers
- Share price: $245.01
- Market cap: $179.74B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $13.79B
- P/E (TTM): 107.8x
- Price / book: 3.70x
The 15 boxes
- ✓ 1. Long-form business notes
Welltower makes money mainly by owning seniors and wellness housing and operating/leasing it through partners, with FY2025 revenue mix of 78% Seniors Housing Operating, 11% Triple-net and 7% Outpatient Medical. The business scaled sharply: revenue was $3.20B in FY2021 and $8.45B in FY2025, operating cash flow $1.28B to $2.88B, and diluted shares 426.84M to 679.52M. FY2020 net income of $978.8M was positive on a -$31.6M pre-tax loss, so that net income is not an operating profitability signal; FY2025 pre-tax income is absent from the data. The loan book was $2,082,265,000 at December 31, 2025 with an approximately 8.9% annual yield.
- ✓ 2. Competitive advantage
Welltower's own account of its edge is scale plus proprietary data and operating systems, not a consumer brand: it collects data on over 2,500 properties and pushes a standardized operating platform (WBS) across its operator network. Competition for acquisitions is broad and fragmented and turns on relationships, certainty of execution, deal structure and cost of capital, so the durable advantages claimed are informational and balance-sheet rather than pricing power. Certificate-of-need and licensure rules limit who can add or operate seniors housing (a barrier to entrants, but also a constraint on Welltower). The sources give no margin, same-store or return-on-capital history; revenue rose from $3.20B (FY2021) to $8.45B (FY2025) and equity from $17.64B to $42.13B, but net income sat above pre-tax income in FY2021, FY2023 and FY2024, so returns cannot be read off the bottom line.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended September 30, 2026) consolidated NOI was $1,469,751K, up from $1,394,463K in Q2 2026 and $1,108,644K in Q3 2025, with seniors housing operating at 65.2% of segment NOI ($897,742K) across 2,818 properties. Net income of $414,823K and FFO of $1,070,791K were both below Q1-Q2 2026 levels, while the balance sheet stayed liquid ($2,274,910,000 cash plus $5,208,520,000 of revolver availability at 9/30/2026) with net debt to book capitalization of 26% and interest coverage of 7.07x. The quarter's driver is external growth: $10,688,259K of acquisitions closed in the nine months to 9/30/2026 at a 5.8% blended cap rate, roughly $7 billion more announced to close by year-end, funded with $7,555,540,000 of gross ATM proceeds. No new risk factors were disclosed in the 10-Q.
- ✓ 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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