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Buy-Side Financial Modeling

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Online Training for Hedge Fund Analysts

Buy-Side Financial Modeling

  •   88 Lessons
  •   6h 43m
  •   923 Students

Led by Hedge Fund Veteran Brett Caughran (ex-Maverick, Citadel, DE Shaw, Schonfeld), this program begins where financial modeling training ends — with a deep-dive into how buy-side analysts build models to make key investment decisions.

$399 Add to Cart
 Prerequisites
Buy Side Financial Modeling presumes knowledge of basic financial & valuation modeling, accounting, financial reporting and Excel. If you do not have this baseline knowledge, you will be able to add these prerequisite courses at checkout.
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Learn the "Buy-Side Mentality"

Meet the Instructor: Brett Caughran (Maverick, DE Shaw and Citadel) will walk you through modeling techniques typically developed over several years on the job.

  • Taught by an Experienced Hedge Fund Professional

    Led by a hedge fund veteran with experience at top buy-side firms, this course is a deep-dive into buy-side modeling that provides tools, frameworks and over a decade of industry experience for students to learn from.

  • Develop Buy-Side Modeling Intuition and Frameworks

    Learn to build buy-side models, understand why the buy-side model is the backbone of investment decisions and how it differs from the sell-side and investment banking model.

  • Understand Buy-Side Modeling Applications

    Learn the importance of tracking and incorporating company-specific key drivers into your models and how to set up your model to develop an actionable perspective on stock valuation.

    • What You Will Learn

    Process Driven Investing

    Understand the role of modeling as a tool for thesis development in the investing process. You’ll learn about:

    • “Alpha load” and the quest for outperformance
    • The model as the backbone of the investing process
    • Stock selection frameworks
    • The typical model use cases (i.e. “Is this a good or bad business”, “Will this stock beat or miss earnings?, etc.)

    Buy-Side Model Construction

    Learn what a PM wants to see from a buy-side model and how that differs from a sell-side model. Starting with a “scratch build” using TSLA, you’ll learn about:

    • The upside of bespoke modeling
    • The raw ingredients needed for your model
    • Architecture to handle a torrent of earnings prints, news flow and market moves.

    Analyzing a Business

    Learn how buy-side Analysts go about the process of understanding a business in depth. You’ll learn:

    • The good business / bad business framework
    • The importance of key driver identification and build your model around what actually drives value
    • Unit economics (i.e. “how does this business make money”)
    • Cost structure analysis, and incremental margins

    Buy-Side Forecasting Frameworks

    Gain a general orientation to forecasting and learn key forecasting frameworks including:

    • Growth stack forecasting, mix accelerator, comp waterfall, box replicator, ramp curve, creative lags, mid-Cycle, data correlations
    • Revenue forecasting & sustaining growth
    • Approaches to expense forecasting
    • The role of company guidance and investor relations in your modeling process.

    Buy-Side Valuation

    Learn the factors that influence valuation, from growth, business momentum, business quality, capital deployment/structure, and terminal value stability.

    • The dichotomy of the DCF and the messy reality of equity pricing
    • The roles of multiples in buy-side investing
    • The core formula for price target derivation
    • Normalized earnings analysis

    Buy-Side Thesis Development

    Here, we will move from the model towards a thesis. You’ll learn:

    • How buy-side analysts use the model to generate outputs that answer “what is the risk/reward”, “what is the upside / downside”?
    • How the model can clarify thoughts on the FEV framework (fundamentals, expectations, and valuation
    • What is baked in? What do we believe is true / what is the expectations gap?
    • Evaluating a view on variance versus consensus
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    What You Will Learn

    • Understand a business in depth: develop “owner’s knowledge” of a company by digesting all the financial data disclosed.
    • How a buy-side model differs from a sell-side model and understanding the nuances of consensus estimates.
    • Assess the health of a business by understanding important financial factors like growth, margins, capital intensity, etc.
    • Analyze business momentum: are the key drivers trending in the right or the wrong direction?
    • Derive an independent valuation: understand what’s baked into the stock price and how your research can lead to an actionable view.
    • Identify earnings revision opportunities: find points in time where a company is likely to beat/miss consensus estimates.
    • Develop your model as a tool to capture news flow and company information in an investment context.
    • Learn Excel formatting conventions and architecture that make your life easier when facing a torrent of earnings prints, news flow and market moves.
    • The role of company guidance and investor relations in your modeling process.
    • Hands-on modeling of important accounting items like tax rate, share count and net debt outlook.
    Show More Show Less

    Who Should Take This Course?

    • Aspiring
      Hedge Fund
      Analysts
    • Upcoming
      Portfolio
      Managers
    • Seasoned
      Asset Managers
    • Sell-side
      to Buy-Side
      Career Switchers
    • Public Equity
      Investors

    Get the Buy-Side Financial Modeling Certification

    Trainees are eligible to take the WSP Buy-Side Financial Modeling Certification Exam upon completion of the Buy-Side Financial Modeling course. Those who complete the exam and score above 70% will receive the certification. The exam is a challenging online examination covering the most difficult concepts covered in the Buy-Side Financial Modeling course.

    Course Samples

    Process Driven Investing and The Role of the Model
    Case Study: Revenue Build
    Business Momentum
    Case Study: Forecasting
    Key Questions: Is This a Good Business?
    Case Study: Price Target
    Prereq 1 Accounting Crash Course
    Prereq 2 Excel Crash Course
    Prereq 3 Analyzing Financial Reports
    Prereq 4 Non-GAAP Reporting
    Prereq 5 Basic Financial Modeling
    Prereq 6 Valuation & DCF Modeling

    Program Prerequisites

    This course presumes knowledge of basic financial & valuation modeling, accounting, financial reporting and Excel. Students with limited experience in these areas can enroll in these prerequisite courses during checkout at special prerequisite pricing.

    Course TOC

    Process Driven Investing
    1. Buy-Side Modeling Course Welcome 2:03
    2. Course Downloads Files
    3. Ecology of the Buy-Side, Required Toolbox and Abilities 4:15
    4. Modeling Course Agenda 1:57
    5. Investment Process Steps 3:52
    6. The Point of Fundamental Research and Search for Alpha 8:48
    7. Life and Role of a Hedge Fund Analyst 2:41
    8. Process Driven Investing and The Role of the Model 2:10
    9. Modeling in Different Styles and Processes 4:16
    10. Modeling Use Cases - 6 questions to focus on 2:12
    11. Use Case 1 - Is this a good business? 2:41
    12. Use Case 2 - Is this stock cheap or expensive? 5:14
    13. Use Case 3 - What expectations are priced into the stock? 2:19
    14. Use Case 4 - Will this company beat or miss earnings? 3:13
    15. Use Case 5 - What metrics will drive the stock? 3:46
    16. Use Case 6 - How much should the stock react? 3:26
    17. What a PM Wants to See and FEV Framework 4:24
    18. MIC Process - Market, Internal view, Catalyst for convergence 0:22
    19. What’s Next 3:25
    20. Process Driven Investing Review Quiz
    Buy-Side Model Construction
    21. Bespoke or Template 3:27
    22. The Thinking Behind the Model and Learning to Model 3:04
    23. Notes on Formatting, Construction and Shortcuts 9:22
    24. Model Sections and Organization 1:14
    25. Reading Stack - 10-K, 10-Q, 8-Ks, Transcripts, etc 5:09
    26. Plate File 2:33
    27. Raw Build, Steps 1-5 (TSLA example) 7:03
    28. Analyzing a Business-Stock 3:15
    29. Analysis Rows - Revenue 2:25
    30. Analysis Rows - Expenses-Margins 1:00
    31. Forecasting Architecture, Step 6 1:06
    32. Balance Sheet 1:59
    33. Cash Flow Statement 3:01
    34. GAAP to Non-GAAP 1:42
    35. Re-Segmenting 0:52
    36. PM View 1:20
    37. WGO Example - Model Basics 2:26
    38. WGO Example - Revenue Build 3:01
    39. WGO Example - Expenses and Profits 0:56
    40. WGO Example - EPS Forecast 0:25
    41. Wrap Up 0:36
    42. Buy-Side Model Construction Review Quiz
    Analyzing a Business
    43. Five Key Questions for Fundamental Investors 3:31
    44. Is This a Good Business? 17:19
    45. How Does This Business Make Money - Unit Economics 3:06
    46. Cost Structure 3:24
    47. Incremental Margin and Uber Example 8:03
    48. Current State - Future State Economics 4:38
    49. Key Drivers - Everything There Is to Know (ETIK) 2:30
    50. Business Momentum 3:17
    51. WGO Example - Five Key Questions Walk Through 22:21
    52. WGO Example - What Do I Need to Figure Out? 1:25
    53. Analyzing a Business Review Quiz
    Buy-Side Forecasting Frameworks
    54. Notes on Forecasting 7:11
    55. Revenue Build 6:24
    56. Revenue Build - Growth Forecasting and Examples of Various Frameworks 14:48
    57. Durability of Growth 4:28
    58. Expense and Margin Forecasting 6:26
    59. Key Drivers 1:40
    60. Three Statements and Below-the-Line Items 3:49
    61. Company Guidance 2:47
    62. Consensus Estimates and Revisions 6:49
    63. WGO Example - Forecasting 5:22
    64. Buy-Side Forecasting Frameworks Review Quiz
    Buy-side Valuation
    65. Valuation and the Model 2:34
    66. DCFs and Terminal Value 4:04
    67. Market Valuation and Multiples 8:01
    68. Applying a Multiple 12:20
    69. Drivers of Multiples, Normalized Earnings and Disaggregating P-E 10:21
    70. Investing Styles and Return Forecasting 6:40
    71. WGO Example - Establishing a Price Target 12:50
    72. Buy-side Valuation Review Quiz
    Buy-Side Thesis Development
    73. Prior Module Recap 7:22
    74. Elements of a Thesis and Risk-Reward 3:48
    75. Communicate Your Idea (The Pitch) 7:34
    76. Developing a Risk Case 2:50
    77. WGO Example - Modeling Recap 7:18
    78. WGO Example - Five Key Questions Recap 11:30
    79. WGO Example - Forecasting 4:39
    80. WGO Example - Price Target 4:26
    81. WGO Example - Thesis Construction 3:45
    82. WGO Example - FEV and MIC Frameworks 2:58
    83. WGO Example - Reverse DCF 4:57
    84. WGO Example - Normalized Earnings 20:46
    85. WGO Example - Risk Checklist and Base-Bull-Bear Cases 5:38
    86. WGO Example - Conclusion and Model Walk-Thru 9:14
    87. Course Wrap Up 2:39
    88. Buy-Side Thesis Development Review Quiz

    Course Highlights

    Taught by a Top
    Hedge Fund Manager

    Brett Caughran (Maverick, DE Shaw and Citadel) will walk you through modeling techniques typically developed over years on the job.

    Used by Leading Buy-Side Investment Firms

    Go through the same training program that our hedge fund, family office and pension fund clients use to train their analysts.

    Real Case Studies
    and Excel Models

    This course uses real financial filings and Excel models to show you how buy-side valuation is done in the real world.

    In-Lesson
    Instructor Support

    Have a question on course content? Communicate directly with the instructor by asking questions throughout the course.

    Learner Feedback

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