QS Research · Michael Burry's Scion Capital analyst template · 2006
WILLIAMS COMPANIES, INC. (WMB)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -56% · downside -66% · upside -33%
The market is paying 15.3x TTM EBITDA of $6.99B, but on the FY2020-FY2025 cycle WMB normalizes to $5.32B EBITDA; section 13's $64 base is wrong because it capitalizes TTM at WMB's own premium multiple. At the 10.4x-13.4x peer range, $5.32B x 11.9x midpoint = $63.3B EV, less $28.64B net debt = $34.7B equity, / 1.223B shares = $28.3 (-56%); 10.4x gives $21.8 (-66%) and 15.3x on normalized gives $43.2 (-33%). TTM FCF is -$108M after $6.10B capex, net debt is $28.64B and leverage is 3.80x, so there is no margin of safety at $64.08. The call is short; even the generous upside case stays below today's price.
Key numbers
- Share price: $64.08
- Market cap: $78.38B
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $15.43B
- EV / EBITDA (TTM): 15.3x
- P/E (TTM): 25.5x
- Price / book: 5.94x
The 15 boxes
- ✓ 1. Long-form business notes
WMB is a fee-based natural gas infrastructure company: the FY2025 10-K shows 11 supply areas, about 800 customers, over 32,000 pipeline miles, 35 processing plants, 9 NGL fractionation facilities, and 423 Bcf of gas storage. FY2025 revenue was $14.90B, operating income $4.20B, operating cash flow $5.90B, and capex $4.89B, after revenue fell from $17.77B in FY2022 to $12.00B in FY2023. The business is organized into four segments in FY2025 versus three in FY2020, and fee-based NGL processing mix rose to about 93% from about 80%.
- ✓ 2. Competitive advantage
Williams claims a real but bounded advantage: interstate pipeline barriers to entry (permits, public opposition), an incumbent asset position on the eastern seaboard and northwest U.S., and gathering contracts that are long-term and may carry acreage dedication. Earnings have been far steadier than revenue, which swung from $7.65B (FY2020) to $17.77B (FY2022) down to $12.00B (FY2023) and $14.90B (FY2025), while operating income rose $2.20B to $4.20B over FY2020-FY2025. The counterweight: FERC and state rate regulation, competition from adjacent facilities and from E&Ps/private equity building their own midstream, and power-sector demand contestable by solar, wind and other fuels.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) showed 10% total revenue growth to $3,223M from $2,923M in Q3 2025, with service revenues up 9% to $2,319M from $2,121M; nine-month total revenues were $9,306M vs $8,752M. Q3 operating income of $1,136M vs $1,109M is flattered by an $83M gain on the Permian gathering asset sale that Q3 2025 did not have, and the nine-month $3,639M includes $277M of asset-sale gains plus a $127M Brazos Permian II gain booked below the operating line. Cost lines grew faster than revenue in Q3 (G&A +64%, O&M +10%, DD&A +10%) and the nine-month commodity-derivative line swung to a $(263)M loss. Capital is being recycled and redeployed: ~$5.1B Momentum acquisition closed 2026-09-03, $3.74B of a $5.34B Pantheon power-project interest sale received in July 2026, and 2026 growth capex guided to $7.3B-$7.9B.
- ✓ 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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