Equity Research interview preparation

Questions

100

Traced to a firm

72

Firms

45

Updated

September 2026

Asked at

All firmsMorningstar12Man Group6Balyasny Asset Management5BLBlackRock5FTFranklin Templeton5MSCI5Jefferies4CSCredit Suisse3Fidelity Investments3Moody's3Perella Weinberg Partners3Point723S&P Global3The Vanguard Group3WMWellington Management3Advent International2Apollo Global Management2Bank of America2Carlyle Group2DED.E. Shaw2Houlihan Lokey2HSBC2Piper Sandler2Sequoia Capital2SSState Street2Viking Global Investors2WBWilliam Blair2ACAQR Capital Management1BGBaupost Group1BMBNY Mellon1Centerview Partners1Coatue Management1Goldman Sachs1GSGuggenheim Securities1HWHarris Williams1Insight Partners1Invesco1Mizuho1Moelis & Company1MSMorgan Stanley1PIMCO1SCSchroders1Scotiabank1T. Rowe Price1TSTruist Securities1

Topic

All topicsResearch process9Stock pitch6Company analysis8Investment philosophy5Valuation14Modelling2Portfolio and risk8Macro8Sector knowledge2Accounting8Career and fit12Industry knowledge6Quantitative research1Sector: technology3Sector: consumer1Sector: healthcare1Sector: energy1Sector: financials2Sector: industrials1Case and estimation2

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseFitBrainteaserMarket view

1. 023What got you interested in investing, and what has changed since then?Career and fitIntermediatefirst roundMorningstarEquity Research · Chicago · 2023BLBlackRockInvestment Research · New York · 2026

   Say this

   The 'what has changed' half is the real question. It is asking whether you have learned anything, so the answer should describe a specific belief you held early and abandoned with evidence.

   Then walk it

   1. The origin should be concrete and modest. A first purchase, a company you knew through family, a competition, a book that made you look at an annual report.
   2. Then the evolution, which is where the substance is. 'I started out buying cheap stocks on low P/E and learned that cheap usually means something is broken' is a real answer.
   3. Or: 'I used to think a good product meant a good investment, and I learned that a great company at the wrong price is a bad investment.'
   4. Support it with the specific position that taught you, including the loss. Losses are more persuasive than wins because they are harder to fake.
   5. Close with the principle you now apply and how it shows up in your process. That converts a personal story into evidence of a method.

   Where candidates lose it

   Telling the origin story and skipping the evolution. Also the stock answer of 'I bought Apple at 15 and it went up'. Luck is not a philosophy; what you changed your mind about is.

   Expect next

   • What would you have done differently if you could go back to when you started?
   • What is your investment philosophy?
   • Tell me about a position you got wrong.

   Reported by candidates at Morningstar (Equity Research, Chicago, 2023); BlackRock (Investment Research, New York, 2026). Source: Wall Street Oasis.

2. 024What is an interesting company you have looked at recently?Stock pitchIntermediatefirst roundWMWellington ManagementPortfolio Management · Boston · 2019Carlyle GroupGeneralist · New York · 2015

   Say this

   Treat it as a compressed pitch. Name the company, why it is interesting rather than just good, what the debate is, and where you come out. 'Interesting' means there is genuine disagreement about it.

   Then walk it

   1. Pick something with a controversy. A company everyone agrees is excellent is not interesting; it is consensus. The interesting ones have a real bear case.
   2. Frame it as the debate: 'the bulls say the new segment re-rates the whole company, the bears say it is a low-margin distraction, and the disclosure does not settle it.'
   3. Then your position and the evidence that moved you.
   4. Then be explicit about what you do not know. 'I have not been able to verify the segment margin, which is why I have not sized it.' Admitting the gap is credibility, not weakness.
   5. Have two ready: one long, one short or avoid. Being able to argue a negative case shows you are not just pattern-matching to good news.

   Where candidates lose it

   Naming a mega-cap with no controversy, or a company you cannot describe financially. Expect immediate follow-ups on multiple, growth and margin, and have those numbers at hand.

   Expect next

   • What does it trade at?
   • What is the bear case?
   • Would you buy it here?

   Reported by candidates at Wellington Management (Portfolio Management, Boston, 2019); Carlyle Group (Generalist, New York, 2015). Source: Wall Street Oasis.

3. 025How large is the hedge fund industry?Industry knowledgeIntermediatetechnicalMan GroupEquity Hedge · London · 2016

   Say this

   Roughly $4 to $5 trillion in assets under management globally, across something like 10,000 funds. If you do not know the figure, build it: the largest firms run $50 to $100 billion each, and the top twenty or so account for a large share of the total.

   Then walk it

   1. The headline number is around $4 to $5 trillion, which is worth knowing if you are interviewing at a hedge fund.
   2. If you are unsure, derive it. The biggest multi-managers run on the order of $60 to $100 billion. Twenty firms at an average of $50 billion is a trillion, and the long tail of thousands of smaller funds adds several more.
   3. For context, that is small relative to global equity market capitalisation of well over $100 trillion, and small relative to the roughly $12 trillion BlackRock alone manages. Hedge funds punch above their weight because of leverage and turnover, not size.
   4. The structural point worth adding: assets have concentrated heavily into a handful of large multi-manager platforms over the past decade, while the number of small funds has fallen. That concentration is the defining industry trend.
   5. And the fee model has moved with it: pass-through expenses at the big platforms rather than the traditional two and twenty.

   Where candidates lose it

   Guessing wildly with no derivation, or quoting a number you cannot contextualise. Being asked this at a hedge fund is a test of whether you know the industry you are applying to. Know the figure and one structural trend.

   Expect next

   • How has that changed in the last decade?
   • What is a multi-manager platform?
   • Why do you want to work at a hedge fund rather than long only?

   Reported by candidates at Man Group (Equity Hedge, London, 2016). Source: Wall Street Oasis.

4. 030What would you have done differently if you could go back to when you started investing?Career and fitIntermediatefirst roundMorningstarEquity Research · Chicago · 2023

   Say this

   Name one specific mistake and the process change it produced. The answer should be a lesson about method, not about a stock you wish you had bought.

   Then walk it

   1. Good answers are about process: position sizing, selling too early, anchoring on purchase price, not writing the thesis down, trading on narrative rather than numbers.
   2. Make it concrete: 'I held a position through three quarters of deteriorating gross margin because I had decided I liked the company. Now I write down in advance what would falsify the thesis, and I check it every quarter.'
   3. The best version includes a behavioural insight about yourself. Knowing your own failure mode is what separates people who improve from people who repeat.
   4. Avoid 'I wish I had started earlier' and 'I wish I had bought more of the winner'. Neither is a lesson and both are things everyone says.
   5. Close with the current habit it produced, so the change is evidenced rather than claimed.

   Where candidates lose it

   Answering with a missed opportunity. That is regret, not learning, and it implies your main reflection is that you should have taken more risk. The expected answer is a process improvement born from a loss.

   Expect next

   • How do you avoid that now?
   • Tell me about a time you were wrong and changed your mind.
   • How do you decide when to sell?

   Reported by candidates at Morningstar (Equity Research, Chicago, 2023). Source: Wall Street Oasis.

5. 036How would you forecast revenue for a company you have never modelled before?ModellingIntermediatetechnicalHoulihan LokeyInvestment Banking · New York · 2026

   Say this

   Build it from drivers, never from a growth rate. Find the two physical quantities that multiply to revenue, price and volume in some form, then forecast each separately against something observable.

   Then walk it

   1. Decompose first. A retailer is stores times sales per store. An airline is available seat miles times load factor times yield. A software business is customers times average revenue per customer. A bank is loan balances times net interest margin.
   2. Forecast each driver against something external: industry capacity, population, disposable income, an installed base, a contract backlog. That makes the forecast falsifiable and lets you update it when the external data moves.
   3. Cross-check top-down. If your bottom-up build implies the company takes six points of market share in two years, you need a reason. Reconciling bottom-up to market size is the sanity check that catches most bad models.
   4. Separate organic from acquired growth. A company growing 15 percent of which 10 is bought is a completely different business from one growing 15 organically, and blending them hides that.
   5. Then sanity-check against history: is the implied growth faster than the company has ever achieved? If so, say why this time is different, or lower it.
   6. A flat growth-rate assumption is acceptable only in the terminal years, and even then you should say what it implies.

   Where candidates lose it

   Applying a growth percentage to last year's revenue. It cannot be argued with, cannot be updated by new data, and gives you no basis for a variant view. Driver-based building is the entire point.

   Expect next

   • What is the driver for the company we cover?
   • How do you reconcile bottom-up to market size?
   • Where does your forecast differ from consensus?

   Reported by candidates at Houlihan Lokey (Investment Banking, New York, 2026). Source: Wall Street Oasis.

6. 038What is the rule of forty, and what are its weaknesses?Sector: technologyIntermediatetechnicalTechnology coverageGrowth equity

   Say this

   Revenue growth plus profit margin should exceed 40. It says a software company can be forgiven for losing money if it is growing fast, or for growing slowly if it is profitable, but not both.

   Then walk it

   1. The logic is a trade-off: spending on growth suppresses margin, so the combined figure measures whether that spend is productive.
   2. The first weakness is the margin definition. Free cash flow margin, operating margin and EBITDA margin give very different scores for the same company, and firms naturally quote the flattering one.
   3. The second is that it treats a growth point and a margin point as equivalent. They are not: for a long-duration asset, a point of durable growth is worth far more than a point of margin, because it compounds.
   4. The third is that it ignores the quality of the growth. Growth bought through acquisitions, or through discounting that damages net retention, scores the same as organic growth from pricing.
   5. And it says nothing about durability. A company at 60 today that decelerates sharply next year is worth less than a steady 42.
   6. So I would use it as a screen to compare companies quickly, never as a valuation input. The valuation question is always durability, and the rule of forty is silent on it.

   Where candidates lose it

   Quoting the heuristic without a critique. Anyone can state it. Naming the margin-definition problem and the growth-versus-margin asymmetry is what shows you have used it rather than read it.

   Expect next

   • Which margin would you use?
   • Would you rather have 20 percent growth at 20 percent margin, or 40 percent growth at breakeven?
   • How do you assess durability of growth?
7. 039How would you analyse a retailer?Sector: consumerIntermediatetechnicalBank of AmericaConsumer and Retail · London · 2026

   Say this

   Same-store sales and gross margin drive everything. Decompose comps into traffic, basket size and price, then check whether margin is being bought with discounting, and watch inventory as the early warning.

   Then walk it

   1. Revenue splits into comparable store sales and square footage growth. Comps are the quality signal; new stores can mask a deteriorating base.
   2. Decompose comps further into transactions and average ticket, and ticket into units and price. A comp driven by price in an inflationary period is weaker than one driven by traffic.
   3. Gross margin is where the truth sits. Rising sales with falling gross margin means discounting, which is buying revenue rather than earning it.
   4. Inventory is the leading indicator. If inventory grows faster than sales for two quarters, markdowns are coming and the margin will follow. This is the single most reliable early signal in retail.
   5. Then the cost structure: occupancy and labour are largely fixed, so retail has high operating leverage. A two-point comp swing moves EBIT far more than it moves revenue.
   6. Then the structural questions: online mix and its margin, private label penetration, and whether the store estate is an asset or a liability. And check the lease liabilities, because a retailer's real leverage is usually in the leases.

   Where candidates lose it

   Focusing on revenue growth without decomposing comps, and ignoring inventory. Inventory-to-sales is the metric that separates people who have covered retail from people who have read about it.

   Expect next

   • What does rising inventory tell you?
   • How do you treat lease liabilities?
   • How would you value it against an online-only peer?

   Reported by candidates at Bank of America (Consumer and Retail, London, 2026). Source: Wall Street Oasis.

8. 043Why can a stock fall on an earnings beat?Research processIntermediatetechnicalLong-short funds

   Say this

   Because the reported number is not what was priced. The market trades on the buy-side whisper and on forward guidance, so a company can beat published consensus and still disappoint on both.

   Then walk it

   1. Published consensus lags. The real bar is the buy-side expectation, which is usually higher into a strong quarter and is not in any database.
   2. Guidance matters more than the quarter. A beat paired with unchanged full-year guidance implies a cut to the rest of the year, and the market does that arithmetic immediately.
   3. Quality of the beat: driven by a lower tax rate, a one-off gain, or a buyback reducing share count is very different from a beat on volume and price. The market discounts low-quality beats.
   4. Forward indicators can contradict the headline: billings, backlog, bookings, orders. A revenue beat with deteriorating bookings is a sell.
   5. Positioning: if everyone already owns it into the print, there is no marginal buyer. A crowded long needs a large beat just to hold its level.
   6. So the framework for a research analyst is always the expectations gap, and the most useful pre-results work is establishing where the buy-side bar actually sits, not what the screen says consensus is.

   Where candidates lose it

   Treating published consensus as the bar. The gap between published consensus and the buy-side whisper is exactly what this question is about, and naming it is the mark of someone who has watched results days.

   Expect next

   • How do you find out where the buy-side bar is?
   • What is a low quality beat?
   • How do you position into a print?
9. 045How would you value a company with no earnings?ValuationIntermediatetechnicalPiper SandlerInvestment Banking · New York · 2026Sequoia CapitalVenture Capital · San Francisco · 2021

   Say this

   Move up the income statement until you reach a line that is meaningful, then value that. Revenue multiples, gross profit multiples, or a forward-year earnings estimate discounted back to today.

   Then walk it

   1. First ask why there are no earnings. A company spending heavily on growth is completely different from one with a broken cost structure, and only the first deserves a growth valuation.
   2. For growth-stage losses: EV to revenue, or better, EV to gross profit, since gross profit strips out the differences in cost of revenue between a software company and a delivery company.
   3. Then normalise: model forward to the year the business reaches a steady-state margin, apply a mature multiple to that year's earnings, and discount back. This forces you to state when profitability arrives and what it looks like.
   4. For asset-heavy or distressed cases, value the assets instead: net asset value, replacement cost, or liquidation value.
   5. For very early stage, the market approach dominates: what did comparable companies raise at, and what did similar businesses exit for.
   6. The discipline that matters: any revenue multiple is an implicit bet on a future margin. Saying 'six times revenue' without saying what terminal margin justifies it is not a valuation.

   Where candidates lose it

   Reaching for a revenue multiple with no view on terminal margin. Also failing to distinguish a company choosing to lose money from one unable to make money. That distinction determines whether the question is valuation or restructuring.

   Expect next

   • What terminal margin justifies that multiple?
   • When do they reach profitability?
   • Why is it difficult to value a first-year firm?

   Reported by candidates at Piper Sandler (Investment Banking, New York, 2026); Sequoia Capital (Venture Capital, San Francisco, 2021). Source: Wall Street Oasis.

10. 046Why is it difficult to value a company in its first year?ValuationIntermediatetechnicalSequoia CapitalVenture Capital · San Francisco · 2021

    Say this

    There is no history to extrapolate, no stable unit economics, and the range of outcomes is enormous. Almost all of the value sits in a terminal state you are guessing at, so any point estimate is false precision.

    Then walk it

    1. No track record means no base rate for your own forecast. You cannot test whether management hits plan because there is no plan history.
    2. Unit economics are unstable. Customer acquisition cost and retention in the first cohorts are unrepresentative, usually because early customers are enthusiasts and the cost of reaching them was low.
    3. The outcome distribution is not normal, it is power-law. Most early companies are worth close to zero and a few are worth enormous amounts, so an expected value calculation is dominated by a tail you cannot estimate.
    4. A DCF is therefore meaningless: 100 percent of the value is terminal, and small changes in assumption swing the answer by orders of magnitude.
    5. What you use instead: the market approach, meaning what comparable rounds priced at; scenario analysis with explicit probabilities; and milestone-based valuation where each funding round buys information rather than value.
    6. And the honest venture framing: you are not valuing the company, you are pricing an option on a team and a market. The diligence weight sits on the founders and the market size, not on the model.

    Where candidates lose it

    Trying to make a DCF work. The expected answer names the power-law distribution and the shift from valuation to option pricing. Saying 'you value the team and the market' is the venture-native response.

    Expect next

    • So what do you actually diligence?
    • How do you size a market for an early-stage company?
    • How does a power law change how you build a portfolio?

    Reported by candidates at Sequoia Capital (Venture Capital, San Francisco, 2021). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.