Equity Research Case Interview Drills

Reviewed by Fallon Han· Updated 2026-06-01 21:30:02.147

This conversation was generated using Cook'd AI's career assistant and reviewed by Fallon Han from our editorial team for accuracy.

I have a research associate mock interview tomorrow for an asset management graduate role in Australia. Can you run me through a live equity research mini-case with limited data and make me give a clear recommendation fast? I need something realistic, not generic.

Absolutely. Here is a tight case. You cover AlphaTech, an ASX-listed software company. Current share price is AUD 12.00. Market cap is AUD 2.4 billion. Last year revenue was AUD 500 million, EBITDA margin was 22 percent, net debt was AUD 50 million. Management gave three data points: - Revenue growth next year should be 12 percent to 15 percent - EBITDA margin could expand to 24 percent if sales efficiency holds - Free cash flow conversion is usually around 70 percent of EBITDA The stock trades at 18 times forward EBITDA. A private competitor just sold at 16 times EBITDA, but it had slower growth. Your task in 3 to 4 minutes: 1. Give me a quick view on business quality 2. Build a simple valuation view 3. Give one upside and one downside scenario 4. End with a buy, hold, or sell recommendation and one sentence on why

Okay, I will start with the business quality. It looks like a decent software business because revenue is growing double digits, margins are already strong, and free cash flow conversion is healthy. But I would want to know retention, customer concentration, and whether growth is recurring or one-off. On valuation, if I use 14 percent revenue growth on AUD 500 million, that gives AUD 570 million revenue. At 24 percent margin, EBITDA would be about AUD 137 million. At 18 times forward EBITDA, that implies an enterprise value around AUD 2.47 billion. After subtracting AUD 50 million net debt, equity value is about AUD 2.42 billion, which is roughly in line with the current market cap, so it looks fairly valued. Upside would be margin expansion and growth above guidance, downside would be slower growth and the multiple de-rating. My recommendation is hold, because the quality is good but the current price already reflects the upside.

Good structure and your math is close enough for a live interview. To make it stronger, tighten the recommendation and show more investment judgment. What you did well: - You identified the core quality drivers - You linked growth and margin expansion to EBITDA - You compared implied value with current market value What to improve: - Say whether the stock is cheap, fair, or expensive in one line before you explain - Use a clearer downside case with numbers - Give a stronger reason for hold instead of sounding undecided Try this format: 1. One-line conclusion 2. Key valuation anchor 3. Upside case 4. Downside case 5. Final call For example, your downside could be: if growth slows to 10 percent and margin stays at 22 percent, EBITDA would be about AUD 128 million, and at a lower 15 times multiple, equity value could fall below current levels. Now re-answer in that structure.

My one-line conclusion is that AlphaTech looks fairly valued to slightly expensive. The valuation anchor is that on my base case, enterprise value is about AUD 2.47 billion, which is basically in line with the current market cap once you adjust for net debt. For the upside case, if growth comes in at 15 percent and margins improve to 25 percent, EBITDA would be about AUD 144 million, and if the market keeps a high multiple, the stock could re-rate higher. For the downside case, if growth slips to 10 percent and EBITDA margin stays flat at 22 percent, EBITDA would be about AUD 121 million. If sentiment also weakens and the multiple falls to 15 times, the valuation would come in well below today’s level. So I would hold, with a cautious bias, because the company quality is solid but I do not see enough valuation upside right now.

Much better. That sounds like a real equity research answer. To make it interview-ready, polish two things: - Replace cautious bias with a sharper reason tied to the variant view - Mention what would make you upgrade or downgrade the stock A strong final version would sound like this: "I would rate it a Hold. AlphaTech is a quality software name with double-digit growth and good cash generation, but at 18 times forward EBITDA the stock already prices in much of the near-term upside. My base case implies fair value, while the upside requires both margin expansion and multiple support. I would turn more positive if management proves sustainable growth above 15 percent with operating leverage, and I would turn negative if growth slows and the valuation multiple compresses." If you want, I can now run a second round where I challenge you with a tougher sell-side style follow-up on downside risks and catalyst timing.

Yes, please do the tougher follow-up. Make it feel like a real asset management interviewer who wants me to defend the call under pressure.

Great. Follow-up question: You have one minute. Why is this not a Sell if the stock is only fairly valued, the multiple is not cheap, and there is no clear catalyst in the next quarter? Answer as if you are speaking to a portfolio manager who cares about downside protection, not just story quality. Then I will grade your response and tell you how to sharpen it for the final round.