Stock Pitch Template (Long or Short Equity Idea)

Stock Pitch: [Company name] ([Long / Short])

A two to four page long or short idea for one listed company, written for a student-managed investment fund, an investment club, a buy-side interview case or an internal idea meeting. It states the recommendation and price target, the thesis in three points, the variant perception (where you disagree with the market and why), the catalysts that will close the gap, bull, base and bear scenarios with probabilities, the risks that would prove you wrong, position sizing, and the exit and review triggers. There is no single standard for a stock pitch; the structure follows common buy-side practice and is original. The worked example uses "Halvard Tools", a fictional listed toolmaker: every figure is invented for illustration. Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax or legal advice, and not a recommendation on any real security.

Document control

Approvals

Revision history

Contents

1. Recommendation summary
2. Investment thesis
3. Variant perception
4. Business and industry snapshot
5. Catalysts and timeline
6. Valuation and scenarios
7. Key risks and pre-mortem
8. Position sizing and portfolio fit
9. Exit, review triggers and monitoring
10. Investment committee questions log
11. Disclosures and AI-use statement
12. Glossary
13. References and sources
14. Standard and licence note

1. Recommendation summary

Example (Halvard Tools, fictional):

Halvard Tools makes power tools, hand tools and accessories for professional trades and serious home users. At EUR 42.00 the shares trade at 12.5 times trailing EBITDA and about 12 times consensus EBITDA two years out, but only about 10.1 times our forecast, because consensus extrapolates flat volumes after a two-year dealer destocking cycle and only a partial margin recovery. We expect margins to recover from 15% to 17% as price increases stick and two plants close, while the cordless professional platform keeps taking share. The base case is worth EUR 52; the bear case, in which the margin stays near the trough, is worth EUR 30. We propose a 4% position, reviewed at each results release.

2. Investment thesis

Write each thesis point as a claim, the evidence that supports it today, the metric that will prove or disprove it, and the date by which you expect to know. The table is the contract you will be held to in the post-investment review.

Explain in two or three paragraphs how the points fit together. In the example, the margin recovery (TH-01) is the main driver of value, the footprint plan (TH-02) makes it durable rather than cyclical, and the platform share gain (TH-03) protects revenue if the end market stays weak. If TH-01 fails, the pitch fails; TH-02 and TH-03 alone do not justify the position.

State what is not part of the thesis. In the example, the pitch does not rely on a recovery in housing starts, on a takeover, or on a multiple higher than the company's own history. Saying this protects the committee from approving the idea for reasons you did not argue.

3. Variant perception

Start from the price. Work out what the current price implies about growth, margins or the multiple, then compare it with your forecast. A pitch that agrees with consensus can still be right, but it has no edge and should say so.

Write the reverse-engineered view in one paragraph. For the example: at EUR 42.00 the enterprise value is EUR 5,640 million (EUR 5,040 million market capitalisation plus EUR 600 million net debt). Applying the ten-year average multiple of 12 times, the price implies FY+2 EBITDA of about EUR 470 million (5,640 / 12). That is a 15.7% margin on flat revenue of EUR 3,000 million, which is consensus (EUR 3,000 million at about 15.5% gives about EUR 465 million). The price therefore assumes no volume recovery and only a partial margin recovery; our edge is the 4% to 5% volume growth and the 17% margin, not the multiple. If our revenue forecast of EUR 3,300 million is right but the margin stays at 15.7%, EBITDA would be about EUR 518 million and the shares worth about EUR 47.80 at 12 times, so volume alone carries part of the upside.

4. Business and industry snapshot

Describe the competitive position in plain terms. Name the factors that make customers choose the company (brand, battery platform lock-in, dealer service, price), and the factors that would let a competitor take share. If the thesis depends on a moat, say how you tested it, for example by comparing returns on capital with peers over a full cycle.

List the industry forces that affect the thesis directly. For the example: professional construction activity, retail do-it-yourself demand, the shift from corded to cordless platforms, steel and battery cell costs, and the bargaining power of large home-improvement retailers. Mark each as a tailwind, a headwind or neutral for the next twelve months.

5. Catalysts and timeline

For each hard catalyst, prepare before the event: what result confirms the thesis, what result is neutral, and what result breaks it. Writing this in advance prevents rationalising a weak result after the fact.

6. Valuation and scenarios

6.1 Method and conventions

State the primary method (for example forward EV/EBITDA, discounted cash flow, sum of the parts, or price to book for financials) and why it suits this company. State the cross-check method. Record the conventions: currency, fiscal year end, share count (basic or diluted), net debt definition (whether it includes leases and pensions), and the date of the balance sheet used.

Example conventions: currency EUR; fiscal year equals calendar year; 120 million diluted shares; net debt includes lease liabilities and excludes pension deficits (shown separately); target price based on FY+2 EBITDA and net debt forecast at the end of FY+1; dividends excluded from the target and added to the expected return separately.

6.2 Target price build

The target price per share for an EV/EBITDA method is:

where $M$ is the target multiple, $\text{ND}$ is forecast net debt and $N$ is the share count.

All values in the table are Example values for the fictional Halvard Tools.

Explain each driver in one line: why the revenue and margin differ across scenarios, and why the multiple moves with them. In the example, the bear case keeps the margin near the trough and lowers revenue by 5% from the current level, with higher net debt than the base case because restructuring cash costs are not offset by savings; the bull case adds faster platform growth and a full pass-through of savings.

6.3 Probability-weighted value and expected return

where $D$ is the expected dividend over the horizon (EUR 0.95 in the example: the 2027E dividend per share in Equity Research Report (finance/equity-research-report)) and $P_0$ is the reference price. The skew is favourable: upside to the bull case is EUR 21.00 per share against downside to the bear case of EUR 12.00, a ratio of 1.75 to 1.

6.4 Cross-check

Give the cross-check result and explain any gap above 15% from the primary value. Typical cross-checks are a discounted cash flow with the weighted average cost of capital shown, a peer multiple table, or a historical multiple range.

Example explanation of the DCF gap: the pitch does not build its own discounted cash flow; it uses the house DCF in Valuation Report (finance/valuation-report), which rests on almost the same operating forecast (FY+2 revenue EUR 3,301 million, EBITDA EUR 561 million, a 17.0% margin) but discounts at 8.04% with 2.0% terminal growth. In that model even an 11.0x exit multiple on 2031E EBITDA gives only EUR 45.24. The gap of 24.4% is therefore about the multiple, not the operating forecast: the EUR 52 base target is the sponsor's own view that the market will pay its ten-year average of 12 times FY+2 EBITDA a year from now. State this openly, because it is the main reason the house research rating is Hold with a target of EUR 44.70, and size the position so that a de-rating to the DCF value is survivable.

6.5 Sensitivity

Show how the base value moves with the two drivers that matter most. The grid below uses the base revenue of EUR 3,300 million and net debt of EUR 480 million.

Example values, recomputed as (3,300 x margin x multiple - 480) / 120.

Read the grid aloud in the meeting: at a 15% margin and a 10x multiple, the shares are worth about EUR 37, about 11% below the current price, which is the main downside if the margin recovery fails but the balance sheet holds.

7. Key risks and pre-mortem

Pre-mortem. Write one paragraph that starts "It is twelve months later and the position is down 25%." For the example: margins stalled at 15.5% because a large retailer forced price concessions, the second plant closure slipped by two quarters, and the market lost patience with the restructuring story while construction data stayed weak. The lesson for monitoring is that the retail price channel (R-01) and the closure timetable (R-02) are the two signals to watch most closely.

What would make us wrong. List the specific observations that would make you close the position regardless of price: for the example, two consecutive quarters with gross margin down year on year, or management withdrawing the savings target.

For a short pitch, add borrow cost and availability, short interest and days to cover, the risk of a takeover bid, and the maximum loss you accept, since losses on a short position are not capped at the amount invested.

8. Position sizing and portfolio fit

The loss to the bear case as a share of the fund is:

Explain how the position fits the fund's investment policy statement: objective, benchmark, permitted instruments, and concentration limits. Link the fund's policy in Investment Policy Statement (Institutional) (finance/investment-policy-statement-institutional) if the fund has one. State whether you will build the position at once or in tranches, and the price at which you would add.

9. Exit, review triggers and monitoring

Monitoring plan: list the data you will update and how often (results, dealer surveys, raw material prices, consensus revisions, short interest), and who owns each item. Record every review in the revision history and close the idea with a Post-Investment Review (finance/post-investment-review) that compares the outcome with the thesis points in section 2.

10. Investment committee questions log

Record the committee decision, the vote and any conditions in the Investment Committee Memo (finance/investment-committee-memo) rather than here; this log keeps the analytical follow-ups.

11. Disclosures and AI-use statement

Write the AI-use statement in plain terms: name the tool, list what it was used for (for example summarising filings, checking spreadsheet formulas, editing prose), and state that the author verified every number and remains responsible for the content. Do not present AI output as your own analysis without review.

Regulatory note: a recommendation distributed to clients or the public can be an investment recommendation under the EU Market Abuse Regulation (Regulation (EU) No 596/2014, Article 20) and its technical standards (Commission Delegated Regulation (EU) 2016/958), or a research report under US rules such as SEC Regulation AC (17 CFR 242.500 to 242.505) and FINRA Rule 2241. Obtain the regulation for the normative text and involve compliance before any external distribution. Personal dealing rules for staff are covered in Investment Adviser Code of Ethics (compliance/investment-adviser-code-of-ethics) and Personal Trading Report (compliance/personal-trading-report).

12. Glossary

13. References and sources

Related templates: Equity Research Report (finance/equity-research-report), Valuation Report (finance/valuation-report), Comparable Companies Analysis (finance/comparable-companies-analysis), Investment Committee Memo (finance/investment-committee-memo), Post-Investment Review (finance/post-investment-review), Finance Formula Sheet (finance/formula-sheet), Decision Journal (personal/decision-journal).

Standard and licence note

Structure aligned with common buy-side stock pitch practice (thesis, variant perception, catalysts, scenarios, risks, sizing, exit), which has no single published standard. The regulatory references are based on public law (Regulation (EU) No 596/2014 and Commission Delegated Regulation (EU) 2016/958 on EUR-Lex; SEC Regulation AC in 17 CFR part 242) and on FINRA Rule 2241 cited by number only. All text, tables and the Halvard Tools example are original and fictional; no real company, ticker or person is described, and nothing here is a recommendation. Check the current official version of every regulation before relying on it. Template licence: MIT.