Project Thornhill — Timed Long/Short Stock Pitch
A 1-hour Stock Pitch / Long-Only case study with a complete model answer
Modeled After
Dodge & Cox
Dodge & Cox's reported super-day case study: a one-hour exercise in which the candidate is handed materials on a company, digests them, and presents a recommendation. Candidates commonly prepare long ideas rather than a long/short pair, the firm being long-only.
Structure and exercise format are modeled after Dodge & Cox — the case-study format the firm is reported to use. The company, the financials and every figure in this case are entirely our own.
The Situation
Thornhill Diagnostics, Inc. (NASDAQ: THDX) makes clinical diagnostic analyzers and the single-use assay cartridges that run on them, and it also owns a reference laboratory.
Thornhill Diagnostics, Inc.
- Sector
- Healthcare / life sciences tools and diagnostics — clinical analyzers, assay consumables and an outsourced reference laboratory
- Size
- Geography
- United States, with the company headquartered in Marlborough, Massachusetts
- Ownership
- Situation
The Prompt
You are interviewing at a fund. The format is a timed ramp followed by a pitch, and you have been given one name.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
The assignment (material-1.pdf)
Company ramp pack (material-2.pdf)
Market data and consensus extract (material-3.pdf)
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 60 minutes.
PART 1
The one-sentence thesis
PART 2
Segment mix and the margin on each
PART 3
The installed base and the pull-through
PART 4
The quarterly line the reported number hides
PART 5
The gross margin bridge
PART 6
Consensus, recast onto your basis
PART 7
The comparable set, unscreened
PART 8
Scenarios, the target and the risk/reward
PART 9
The bear case, and what you did not have time to do
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished memo is in the solution set below.
- 0:00 – 0:20
read, and do not start building
- 0:20 – 0:40
the segment build and the margin bridge
- 0:40 – 0:50
scenarios, the target and the skew
- 0:50 – 1:00
write, and stop analyzing
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
A pitch is a thesis, not a valuation
The deliverable is a claim that the market believes one thing, that you believe another, and that you can say why the market is wrong and what would tell you that you are. A pitch with no disagreement in it is a research note. This is the single most common way a strong banking candidate fails a buyside interview: everything is correct, nothing is contested, and there is no reason to own the stock.
The one-sentence discipline
Direction, price, what the market believes, what you believe instead, the earnings number, the multiple, the target and the skew — in one sentence you can say out loud without reading. It forces you to decide which single disagreement you are actually being paid for, and everything that does not survive the sentence was supporting evidence rather than thesis.
Composition effects, and why a reported line lies
When a segment contains a compounding product and a collapsing one, the reported growth rate describes neither. The same arithmetic runs through gross margin: a low-margin product leaving raises the blended margin even if nothing improves, and a cost of winning volume can land on the wrong segment's margin line and look like a problem. Both are visible only if you take the composite apart, and both are why the tape and the business can disagree for years.
What is in the earnings decides the multiple
Any target that is an earnings number times a multiple has to say what is in the earnings. Stock-based compensation is the case in point: the same year can be 21.5x with SBC added back and 30.6x with it charged, and both are correct arithmetic. Only one of them can be compared with a peer multiple. Pick a basis, restate everything — your own earnings, the company's history and every comparable — onto it, and say out loud which one you chose.
An installed base is not a growth rate
A razor-and-blade business earns on benches already installed, so next year's consumables revenue is largely contracted before the year begins. Building it as base times pull-through rather than as a growth percentage tells you something a growth rate cannot: whether the forecast needs the company to win new customers, or merely needs the customers it already has to keep buying. Those are different risks and they deserve different levels of confidence.
The multiple that cannot see the difference
An EV/EBITDA multiple values a dollar of high-margin recurring consumables profit and a dollar of send-out laboratory profit the same way. An earnings multiple does not. When a peer set splits into sub-groups that trade ten turns apart on earnings and less than one turn apart on EBITDA, that is the market saying the mix matters, and it tells you which yardstick your pitch has to be argued on.
Short interest is evidence, not a signal
Elevated short interest tells you something about what the market believes and roughly how crowded the disagreement is. It is not a reason to be long and it is not a reason to be short. Days to cover tells you whether an exit is possible without moving the stock. Both belong in the positioning paragraph and neither belongs in the thesis.
How much of the target is the multiple
The first thing an experienced interviewer does with a price target is ask how much of it is earnings and how much is a re-rating, and 'none of it' is almost always a lie. Decompose it yourself before the question arrives: hold today's multiple flat, see where the earnings alone take you, and quote the split. A target that is mostly earnings is a different proposition from one that needs the market to change its mind about the multiple, and saying which one you have is worth more than pretending the question does not apply.
Scenarios built from levers, not from haircuts
A bear case that multiplies the base case by 0.8 tests nothing. A bear case built by moving the same named drivers the base case is built on — the operating driver, the segment margin, the cost line — produces an earnings number you can defend and an exit multiple you can point at in the evidence. It also tells you what to watch, because each lever is now something the next print either confirms or does not.
Saying what you did not have time to do
An hour buys the segment build, the margin bridge and the scenarios. It does not buy a cash flow statement, a debt schedule, working capital, a competitive teardown or any primary research, and one of those omissions usually goes straight at the thing your thesis depends on. Naming them, and stating the direction of each simplification, is worth more than pricing one more thing — and claiming to have covered everything is worth less than saying nothing.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: memo, built the way a banker would actually build it. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Ramping on a name under time pressure
- —One-sentence thesis discipline
- —Segment mix and margin bridge
- —Variant view against consensus
- —Risk/reward and scenario framing
- —Defending a pitch in Q&A
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the memo and the audio walkthrough.
Get StartedDownloads are available to Diamond members
Memo (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Project Thornhill — Timed Long/Short Stock Pitch
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Why is the written artifact so short?
Because the write-up is not what is being graded. The format allocates a couple of minutes to the company overview and the rest of the session to questions, and the source describes interviewers actively cutting the overview short to get to the Q&A. The memo exists so the interviewer can see your structure and your numbers while you defend them. A longer document is usually a candidate hiding.
Should I build a discounted cash flow?
No. A pitch on a 22-month view is argued on the earnings number and the multiple, and a cost-of-capital debate adds pages and changes no decision. If you find yourself defending a terminal growth rate you have stopped pitching the stock and started defending a spreadsheet. Concluding 'the DCF says $42' is not a pitch — it is a valuation, and nobody asked for one.
How long should the company overview be?
Two to three minutes, and treat that as a cap rather than a target. Segments as a percentage of revenue, the gross margin on each, and one sentence on how the company makes money. Everything else the interviewer will ask for if they want it. Candidates routinely burn a third of the session narrating a business the interviewer already knows.
What actually counts as a variant view?
A statement of the form: the market believes X, I believe Y, and here is the evidence that Y is right and the specific thing that would tell me it is not. It has to be falsifiable and it has to be something the market could plausibly be getting wrong — an under-appreciated composition effect, a driver that is contracted rather than forecast, a cost that is landing on the wrong line. 'It is cheap' is not a variant view; it is an observation about the multiple, and the multiple is public.
Do I have to pitch it long?
No. The prompt is long or short, and a well-argued short on the same evidence is a complete answer. What is not a complete answer is a hedge — 'I would want to do more work' — which is true of every idea anybody has ever had and tells the interviewer nothing about how you think. Take a side, size the skew, and be explicit about what would change your mind.
What is a fair risk/reward to claim?
Whatever the arithmetic gives you. Three-to-one on a mid-cap with a slow catalyst usually means the bear case is decorative — built to lose a plausible amount rather than built from the same levers as the base. A two-to-one you can defend, with a bear case de-rated to a multiple that actually exists in the peer set, is a stronger answer than a three-to-one that dissolves under one question.
They asked me for a pair trade. What are they testing?
Whether you know what your thesis is actually exposed to. A good pair strips out the part of the return you are not being paid for — the sector, the end market, the rate sensitivity — and leaves the specific disagreement you claim to have. Naming the hedge as a hedge rather than pitching it as a second idea is the point: it tells the interviewer you know which risk you are taking and which you are renting out.
How do I ramp on a name in under an hour without missing something?
Have a fixed order and follow it every time. Revenue by segment and the margin on each; the operating driver behind the largest segment; the last four quarters against the prior year; where consensus sits and on what basis; where the multiple has been. Only then form a view. The structure matters more than the speed, because a repeatable ramp fails visibly, since you know which box is empty, while an improvised one fails without your noticing.
What should I keep in front of me during the questions?
A short metrics sheet: the exit-year earnings, the exit-year multiple, the current trading multiple on both the published and your own basis, the peer medians, and for anything cyclical the shape and length of the cycle. It is the difference between answering a question in four seconds and hunting through a model while the interviewer waits. In this case that sheet is the memo's final exhibit rather than a separate document.
Is a stock pitch really the whole interview?
It is the center of it for a fundamental equity seat, and it is the part that transfers least well from banking. The technicals a banking candidate has drilled — accretion, LBO mechanics, purchase accounting — are the wrong preparation, because nothing is being bought. What is being tested is whether you can hold a differentiated view, defend it against someone actively trying to break it, and change your mind for a reason rather than under pressure.
About This Stock Pitch / Long-Only Case Study
Stock Pitch / Long-Only case study for hedge fund interviews. 60-minute format covering ramping on a name under time pressure, one-sentence thesis discipline, segment mix and margin bridge. Includes the full prompt, a written memo and an audio walkthrough.
This case study sits in Hedge Fund, under Stock Pitch. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
60-Minute Format
The time limit a real assessment would give you
Memo
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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