An investment thesis is a detailed analysis and recommendation that serves as the foundation for an investment decision. Investment theses are commonly presented in slide deck format to effectively communicate key data, assumptions, and conclusions to decision makers. When creating an investment thesis presentation, it is important to succinctly convey your viewpoint while backing up claims with credible research and financial analysis. This article provides a comprehensive guide to developing compelling investment thesis presentations, from formatting considerations to persuasively presenting assumptions and conclusions.
Include standard slides on company overview, industry analysis, and financial performance
An investment thesis presentation should start with standard slides providing background on the company, its products/services, competitive advantages, and financial performance trends. The company overview slide gives brief highlights like founding year, headquarters location, leadership team, and key offerings. Industry analysis examines factors like concentration, growth outlook, barriers to entry, competitive landscape, and regulatory issues. Financial performance analysis looks at historical revenue, earnings, profitability, leverage, cash flow, and other key metrics while noting any concerning trends. These introductory slides contextualize the investment opportunity.
Present your projection model and explain key assumptions
At the core of an investment thesis is the financial projection model, so the presentation needs to walk through projected income statement, balance sheet, and cash flow statement line-items. Carefully explain the reasoning and assumptions behind revenue growth rates, profit margins, capital expenditures, depreciation, taxes, working capital changes, and other model inputs. Provide benchmark data, operating metrics, and growth outlooks to justify your projections. Detail the most impactful and uncertain assumptions using sensitivity analysis slides.
Show scenario analysis assessing upside and downside cases
Since projections involve assumptions about the future, smart investment theses stress test their models using scenario analysis. Build upside and downside operating scenarios by adjusting key inputs like revenue growth, margins, or capital spending. Flow the implications through your model and compare the resulting valuation in each scenario to frame the range of potential outcomes. Scenario analysis enhances your credibility by demonstrating you have thoroughly stress tested your assumptions.
Highlight valuation methodology and derive target price
A compelling investment thesis clearly explains the valuation methodology, which could involve discounted cash flow, comparable multiples, precedent transactions, or other techniques. Outline the valuation approach, highlight public and private comps, and note any discounts/premiums applied. Clearly show how these analytical steps lead to the final target price and expected IRR. The valuation methodology ties the analysis together into an actionable conclusion on the attractiveness of the investment.
Discuss implementation strategy and post-investment plan
Don’t just conclude an investment thesis with the target valuation. Outline the proposed ways to implement the investment such as gradually building a position, participating in a capital raise, or engaging with management. Share post-investment strategic and operational value-creation plans. This shows you have thought through how to execute on the investment thesis from analysis to exit.
An investment thesis presentation distills complex analysis into a compelling slide deck. Focus on conveying key assumptions and valuations in a credible, defensible manner. Scenario analysis and clear valuation methodologies differentiate a rigorous investment thesis ppt from generic stock pitches. Follow best practices on structure and content to produce concise, persuasive presentations.