Case 056Long pitches and valuationWarm up

You have two minutes to pitch Corvane Logistics, at Rs 240 with EPS of Rs 12, EPS growth of 18% a year for three years and peers at 25x. Build the pitch: the one-line thesis, the three numbers, the value and the one risk that would change your mind.

Point72central · 2025Man GroupLondon · 2016

The situation

Corvane Logistics runs contract warehouses for consumer brands. Its shares trade at Rs 240 on EPS of Rs 12, a P/E of 20. Listed logistics peers trade at 25x. Corvane has signed contracts for new warehouses that, on your model, lift EPS by 18% a year for the next three years. Its largest client is 30% of revenue and its contract comes up for renewal in twelve months.

The PM says: you have two minutes, go.

Your task

Give the pitch in the order a PM wants it: the thesis in one line, the three numbers that carry it, what the stock is worth, and the one risk that would change your mind.

Quick check

Your value is 25x year-three EPS. How much of the move from Rs 240 comes from earnings growth rather than the multiple?

Worked solution

Try it on paper, then open one step at a time.

30-second answerThe answer to give first

Thesis: contracted warehouse wins lift Corvane's EPS 18% a year while the stock trades at 20x against peers at 25x. EPS reaches about Rs 19.7 in three years, and 25x on that is about Rs 493, roughly twice today's price if growth holds. Earnings do 1.64x of it and the re-rating 1.25x. The risk that would change my mind is the largest client, 30% of revenue, renewing in twelve months.

Step 1What goes in the first fifteen seconds?

The thesis, in one sentence the PM could repeat to their own boss. Think of telling a friend why a restaurant down the road will be packed next year: it has signed the lease on two more floors and the queue is already out the door. A good thesis names the reason the market is wrong and the thing that will show it: here, contracted growth that a 20x multiple does not price. Everything after that sentence is support, and a PM who does not buy the first sentence will not listen to the rest.

The two-minute pitch as one card: four boxes, in this orderCORVANE LOGISTICS | LONG | Rs 2401 Thesis2 Three numbers3 Value4 What changes my mindContracted warehouse wins lift EPS 18% a year;the market prices Corvane like a slow grower.18%EPS growth, 3 yrs20xvs peers at 25xRs 19.7EPS in year 325 x Rs 19.7 = about Rs 493, 2.05x in 3 yearsBear case: 15x on flat EPS = Rs 180, -25%Largest client, 30% of revenue, renews in 12 months.Lose it and the growth case is gone.1One sentence the PM can repeatto their own boss2Only the numbers that carry itgrowth, multiple, earnings3Value = EPS x multiplethen the downside, unasked4The fact that would proveyou wrong, with a date
A two-minute pitch for Corvane fits one card: the thesis in a line, three numbers (18% growth, 20x against 25x, EPS of Rs 19.7), a value of about Rs 493 with a Rs 180 bear case, and the client renewal that would change the view.
Step 2Which three numbers carry the pitch?

Growth, price and the earnings they produce. 18% EPS growth for three years takes Rs 12 to about Rs 19.7, 12 x 1.18 x 1.18 x 1.18. The multiple gap, 20x against 25x, is the second number, because it says the market is not paying for that growth. The third is the year-three EPS itself, because the value hangs off it. Resist a fourth: every extra number costs ten seconds and dilutes the three that matter.

The relationship
Value=12×1.183×25=19.72×25≈493\text{Value} = 12 \times 1.18^3 \times 25 = 19.72 \times 25 \approx 493
12EPS today, Rs
1.18^3three years of 18% EPS growth, 1.64x
25the peer multiple you expect Corvane to earn once growth shows
What it says in wordsYear-three earnings of about Rs 19.7 at the peer multiple give a value of about Rs 493, 2.05 times today's price, about 27% a year.
Step 3How do you show the value is not one hopeful number?

Split it and give the downside before you are asked. Earnings growth at an unchanged 20x takes the stock to about Rs 394; the re-rating to 25x adds the rest. If growth comes in at 10% and the multiple stays at 20x, the stock is worth about Rs 319, still 33% up. If earnings stall and the market de-rates it to 15x, it is Rs 180, -25%. Saying the bear case yourself tells the PM you have looked for it.

Where the upside comes from, and what is left if part of it failsToday, 20x on Rs 12.0Rs 240Growth delivered, still 20xRs 394Growth and re-rating to 25xRs 49310% growth, still 20xRs 319Flat EPS, de-rated to 15xRs 180
Corvane's move from Rs 240 to about Rs 493 is Rs 154 from earnings growth at 20x and the rest from re-rating to 25x; with 10% growth it is still worth about Rs 319, and with flat earnings at 15x it falls to Rs 180.

Finish with the risk, and make it specific enough to check. The largest client is 30% of revenue and renews in twelve months; if it leaves, the 18% growth becomes something close to zero and the bear case is the right one. A risk with a date on it is worth more to a PM than a list of five generic risks, because it tells them when they will know whether you were right.

Where candidates lose it

The frequent failure is spending the two minutes on what Corvane does: its history, its warehouses, its management. The PM asked for a pitch, and a description is not one. Lead with the thesis and let the business description come only as far as the thesis needs it.

The second is giving only the upside. A pitch with no bear case and no named risk sounds like a sales call and invites the PM to find the hole for you.

What the interviewer asks next

  • Why do peers deserve 25x? What would make Corvane deserve less?
  • How would you size this position in a book of twenty longs?
  • The client renews but at 10% lower prices. What happens to your EPS path?

Asked at Point72, Equity Research, central, 2025 (Wall Street Oasis): then pitch a stock. HR will ask several questions about your stock pitch
Asked at Man Group, Equity Hedge, London, 2016 (Wall Street Oasis): Pitch me a stock. How large is the hedge fund industry?

Company names and figures are illustrative.