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"The Pulse" --#74 / Different Industries, Different Profiles

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The Pulse
October 27, 2024

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Recruiting Timeline:

Banking:

Where We’re At:

  • SA 2026: No updates this week. 3 firms are actively recruiting for summer 2026 positions. By now, your networking should be slowing down as you begin behavioral and technical interview preparation. December will be a much busier month for app openings.  

  • FT 2025: SMBC opened its application. There are currently 60 firms actively recruiting for FT 2025. Please reach out if you are looking for coaching!

New SA 2026 Applications:

  • None

New FT 2025 Applications:

  • SMBC: Middle market Japanese bank; hiring FIG analysts (FT 2025)

See below to gain access to our premium database, updated weekly, which houses the application processes for over 200+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

  • The first SA 2026 application was released this week. This is highly unusual, but Alvarez and Marsal released its 2026 Restructuring Summer Analyst role. 

    47 SA 2025 applications have been released along with 55 FT 2025 apps.

SA 2026 released apps:

  • Alvarez & Marsal - Restructuring Summer Analyst (SA 2026)

SA 2025 released apps:

  • Capital Edge Consulting - Summer Intern (SA 2025)

FT 2025 released apps:

  • DIA Associates - Junior Analyst (FT 2025)

  • Capital Edge Consulting - Consultant (FT 2025)

Apply ASAP if you’re interested!

Buyside:

Where We’re At:

  • SA 2026: No updates here. Currently 4 buyside firms recruiting for SA 2026 seats. 

New SA 2026 released apps:

  • None

Premium Database:

The database is updated weekly and contains 200+ Investment Banking and Consulting internships/full-time positions along with:

  • Interview tips for specific companies

  • Interview prep material

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  • Insider information about the application process

  • Professionals to network with

  • Buyside deadlines, interview prep, and people to network with for the sweatiest of students

We send the updated dataset every week with the latest banking and consulting job postings. We released our 74th update today.

Students we have been helping have already landed roles at Blackstone, Goldman, J.P. Morgan, Jefferies, Citi, and Solomon.

To get access to the database and the weekly updates, you pay a one-time fee of $50 (Venmo: ThePulsePrep / Credit Card: (ThePulsePrep—Stripe.com) that grants you annual access to the updated database (You can enable purchase protection if concerned). If you don’t find our services helpful, we simply ask for feedback on an area we can improve upon and will refund your $50.

This is a small investment for a huge payout when you secure your dream offer!

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Market Update:

Different Industries, Different Profiles  

Recently, Michael Mauboussin wrote: Measuring the Moat. This is a fantastic (semi technical) article about what it takes to assess a business’s competitive advantage. This is a core component of value investing. However, what intrigued me was the analysis of the airline industry—it inspired me to discuss industry classification.

During an interview, one of the more challenging technical questions you can receive is an industry classification question. 

Essentially, you’ll be given a group of different financial metrics (EBITDA margin, CAGR, leverage profile, etc) and be asked to distinguish the industry that company operates in.

So, today we are comparing some basic financial characteristics across industries. There are hundreds of different industries and so many companies may technically operate in several different industries.

The best way to understand the quantum of industries and granularity of specification is by taking a look at all of the NAICS Codes available (NAICS).

For simplicity, we will only cover 4 industries: software (internet), auto, retail (grocery), and oil & gas (production & exploration).

Industry Metrics (Source: Damodaran)

As you can see, the financial profile of your typical internet company is vastly different from the financial profile of your typical production / exploration O&G company.

btw leverage here is defined as Debt / EBITDA and operating margin excludes stock-based compensation 

Clearly, you can never compare a software company to an O&G producer. It just doesn’t make sense. They’re entirely different businesses in entirely different industries.

Some industries such as O&G production create fantastic compounders, companies with substantial ROIC - WACC spreads. And some industries like internet software appear to produce ‘capital black holes.’

However, you can’t judge a book by its cover. There are many outliers in each industry which perform entirely different from the pack!

You can look here: Damodaran Industry Classification to see which companies fall within the specified industries.

But what are the fundamentals driving this disparity in industry characteristics?

  1. Industry seasoning

  2. Industry purpose

Going back to our comparison of the O&G production industry with the internet software industry, we can take a step back and realize that these industries are at very different stages of maturity. They also serve very different needs for their customers.

O&G production has been around for hundreds of years. Software has only been around for a few decades. O&G production companies tend to be much older than internet software businesses.

Businesses at the earlier stages tend to have a). better growth prospects and b). worse operating characteristics than more seasoned businesses. That is exactly what we see when comparing the O&G production industry to the internet industry.

I intentionally left out the fact that the internet industry has a CAGR of ~11.4% vs. O&G production CAGR of ~6.1%. So, don’t be quick to think that the mature O&G production industry is far ‘better’ than the fledgling internet industry. Once again, I reiterate that you cannot compare businesses across different industries! All comparisons must be apples to apples.

Regarding purpose, the O&G production industry produces rare energy to be consumed by the entire world. The internet software industry looks to create new software to power the digitization of the world. One industry is a bit more critical than the other, I’ll let you decide which. Hint: one industry wouldn’t exist without the other 

I reach my final point. NEVER COMPARE COMPANIES ACROSS INDUSTRIES. They’re too different!

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

Learning Point of the Week:

Enterprise Value

I can’t believe I waited until the 74th update of The Pulse to discuss Enterprise Value in detail. Below, I breakdown enterprise value so that you never need to be second guessing yourself during an interview!

You might recognize this from our recent ‘Technical Thursday’ post on LinkedIn! Technical Thursday -- Enterprise Value

Enterprise Value is the value of the firm available to all stakeholders.

When a company is being acquired, what does a buyer need to pay for? 

-They need to pay for the market value of the business's operations (how it makes money). ✅ 

Market capitalization (shares outstanding x share price) represents the value of a business's operations.

-They also need to pay for the market value of the business's obligations (who the company owes). ✅ 

Total debt represents the value of the business's obligations.

-They DON'T need to pay for the cash on the business's balance sheet. ✅ 

Why?

Cash is not an operating asset. The buyer can actually use cash acquired to help pay for the business or pay off debts.

Equation: Market Cap + Debt - Cash = Enterprise Value.

Discovering the enterprise value of a business is one of the key responsibilities in finance (banking, consulting, private equity, hedge funds, etc).

Why?

Investors often buy and sell stakes of businesses based on Multiples of Enterprise Value! We will touch upon Multiples in next week's Technical Thursday as we begin to dive into valuation

Going Forward:

If you’re a senior thinking about buyside recruiting, we want to chat! Please shoot us an email @[email protected], would love to help you out.

Coaching Details:

Students we coached for SA 2025 have received offers at Goldman, JP Morgan, Evercore, and many other firms. Roughly 95% of those coached received offers last year!

Please reach out to us with any questions about recruiting or if you’re interested in meeting the team! ([email protected])

We are happy to chat, review resumes, or help set up a coaching session

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“The Pulse” #74