Filing Flows › Companies › Western Midstream Partners, LP › Analysis traps
Western Midstream Partners, LP (WES): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Nov 4, 2026; rules v1.1
Western Midstream Partners, LP (WES): 1 rule of 10 triggered on the filings to Sep 30, 2026: FCF growth = the business improved. 1 to review; 4 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
FCF growth = the business improved Triggered · severity high · confidence medium
Free cash flow rose $192M (+15%), from $1.3B to $1.5B, but working capital released $96M more cash than the year before and capital expenditure fell by $106M: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $10M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 77.82 a share (price 39.85); 72% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 58.99 to 100.36; across every method the research ran the range is 14 to 276. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Triggered severity high · confidence medium
Free cash flow rose $192M (+15%), from $1.3B to $1.5B, but working capital released $96M more cash than the year before and capital expenditure fell by $106M: more than the whole increase came from sources that need not repeat. Operating cash flow before working capital fell by $10M.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $2.1B |
| Operating cash flow | $2.2B |
| Capex, year before | $834M |
| Capex | $728M |
| Free cash flow, year before | $1.3B |
| Free cash flow | $1.5B |
| Change in FCF | $192M |
| Change in capex | −$106M |
| Working capital: change in its cash contribution | $96M |
| Of which: capex cut | $106M |
| Of which: working capital released | $96M |
| Share of the increase that need not repeat | +105.3% |
| Operating cash flow before working capital: change | -10118000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Insufficient data
fewer than two fiscal years of stock compensation and share counts on file
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 55% against revenue 25% in Q3 2026: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +25.4% |
| Receivables, year over year | +55.4% |
| Quarter before | Q1 2026 |
| Revenue y/y, quarter before | +22.5% |
| Receivables y/y, quarter before | +20.8% |
| Days sales outstanding | — |
| DSO, median of eight quarters | 67.0 |
| Receivables | $1.1B |
| Revenue | $1.2B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Insufficient data
no balance-sheet cash or debt on file
D03 EPS growth = profit growth Insufficient data
no quarter with EPS, net income and diluted shares for both this year and last
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $1.2B is not at a cyclical high against the last eight years (median $1.0B, best $1.6B): the P/E of 12.8× is on a normal year.
The figures and how they are read
| market value | $15.7B |
| net income ttm | $1.2B |
| pe ttm | 12.80 |
| net income median fy | $1.0B |
| pe mid cycle | 15.40 |
| net income peak fy | $1.6B |
| years | FY2018 / 369.0; FY2019 / 697.0; FY2020 / 527.0; FY2021 / 916.0; FY2022 / 1217.0; FY2023 / 1022.0; FY2024 / 1574.0; FY2025 / 1181.0 |
| down years in window | 3 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 2026 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 77.82 a share (price 39.85); 72% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 58.99 to 100.36; across every method the research ran the range is 14 to 276. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 77.82 |
| price | 39.85 |
| terminal value share | +71.7% |
| swing by input | Revenue growth (each year) / ±5 pts / 58.99 / 100.36; WACC / ±1 pt / 61.91 / 102.43; Operating margin / ±3 pts / 71.27 / 84.38; Terminal growth / ±0.5 pt / 72.38 / 84.58 |
| range all methods | 13.92; 276.02 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Western Midstream Partners, LP: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.