The Bear Case Cheat Sheet
7 Examples That Actually Get Candidates Hired
by Ryan J. Ross, Founder, Stock Pitch Lab
Every stock pitch ends the same way: "What's the bear case?"
And every weak candidate gives the same answer: "Competition could intensify. Macro could deteriorate. Management could fail to execute."
Congratulations—you just described every company in the S&P 500.
Here's what PMs actually want to hear: the specific variable that would make you sell, the threshold where your thesis breaks, and how you'd know you're wrong.
1. Hims & Hers (HIMS)
Sector: Healthcare / Telehealth | Bear Case Type: Regulatory & Platform Risk
Weak Bear Case:
"The GLP-1 market is competitive. Novo and Lilly could squeeze margins. Regulatory risk around compounded drugs."
Strong Bear Case:
"Thesis breaks if FDA enforcement on compounded semaglutide accelerates or Novo/Lilly drop self-pay prices below $300/month. HIMS guided to $725M in GLP-1 revenue for 2025—but that excludes commercial semaglutide dosages they can no longer sell. Stock down 40% in Q4 after Novo partnership collapsed in July. Watching two things: (1) FDA warning letters to compounding pharmacies, and (2) Novo's January 2026 oral Wegovy launch at $25/month for insured patients. If HIMS can't pivot to liraglutide and oral solutions fast enough, the $6.5B 2030 revenue target becomes fantasy. I'd exit below $20 if Q1 2026 shows subscriber churn above 15%."
Why it works: This isn't 'regulatory risk'—it's a specific regulatory event (FDA enforcement timeline), a quantified competitive threat ($300/month price threshold), and a measurable exit trigger (subscriber churn rate). The candidate knows the Novo partnership failed, knows the oral Wegovy launch date, and has a price target tied to a specific metric.
2. Robinhood (HOOD)
Sector: Fintech | Bear Case Type: Revenue Cyclicality & Macro Sensitivity
Weak Bear Case:
"Robinhood is dependent on retail trading activity. Crypto is volatile. Interest rate cuts could hurt net interest income."
Strong Bear Case:
"Thesis breaks if crypto trading volume drops 50%+ from current levels and interest rates fall faster than deposit costs reprice. In Q3 2025, crypto was 36% of transaction revenue—up 300% YoY—but that's exactly what makes this fragile. Net interest income ($456M, 36% of revenue) benefited from elevated rates; every 100bps Fed cut costs ~$60M in NIM. The bull case requires HOOD to successfully diversify into prediction markets, futures, and international—but these are unproven at scale. Watching Bitcoin's 90-day realized volatility: if it drops below 40% (currently ~55%), trading revenue compresses. I'd trim at $100 if Q1 2026 crypto volumes fall below $15B (vs. $40B in Q3)."
Why it works: The candidate understands the revenue mix (36% crypto, 36% NII), knows the specific NIM sensitivity ($60M per 100bps), and uses a volatility metric (Bitcoin 90-day realized vol) as a leading indicator. The exit trigger is volume-based, not price-based.
3. SoFi Technologies (SOFI)
Sector: Fintech / Consumer Lending | Bear Case Type: Credit Quality & NIM Compression
Weak Bear Case:
"Consumer credit is weakening. Unsecured personal loans are risky. Competition from banks and fintechs."
Strong Bear Case:
"Thesis breaks if personal loan net charge-offs exceed the 7-8% lifetime loss tolerance management has guided to. Current NCO rate is 2.6% annualized—looks healthy—but the portfolio is young and untested in a real recession. Unemployment is the key variable: every 100bps increase in unemployment historically drives ~50bps increase in NCOs for unsecured lenders. SOFI's 5.84% NIM is exceptional, but it's built on a deposit beta assumption of 30%—if deposit competition forces that higher, margins compress fast. Watching two things: (1) 90+ day delinquency trends in the personal loan book, and (2) deposit rate changes from competitors like Marcus. If unemployment hits 5% and NCOs tick above 4%, the 'bank charter premium' evaporates. I'd exit below $18 on those conditions."
Why it works: This shows understanding of credit mechanics (NCO vs. delinquency, lifetime loss tolerance), the specific sensitivity (unemployment → NCO relationship), and the NIM risk (deposit beta). The candidate isn't saying 'credit could deteriorate'—they're saying at what unemployment level and NCO threshold the thesis breaks.
4. DocuSign (DOCU)
Sector: Enterprise SaaS | Bear Case Type: Platform Disruption & Commoditization
Weak Bear Case:
"E-signature is becoming commoditized. Microsoft and Adobe are competitors. Growth is slowing."
Strong Bear Case:
"Thesis breaks if Net Dollar Retention falls below 100% for two consecutive quarters—a sign that the IAM pivot isn't driving upsell. NDR just recovered to 102% in Q3 2025 after bottoming at 99%, but the real test is whether 'good enough' AI tools from Microsoft and Google commoditize the base e-signature product before IAM scales. Adobe has 1.7M customers in its Acrobat ecosystem; if they integrate basic agreement intelligence into the OS layer, DocuSign's $50B TAM claim shrinks dramatically. Watching IAM attach rates: management said IAM would be 'low double digits' of growth by Q4 2026. If that slips to single digits, the platform pivot is failing. I'd exit below $60 if Q2 2026 shows IAM adoption below 30,000 customers (currently ~25,000)."
Why it works: The candidate knows the specific metric that matters (NDR), the competitive dynamic (Microsoft/Adobe at the OS layer), and has a quantified adoption threshold (30K IAM customers). This isn't 'competition'—it's a specific scenario where the platform transition fails.
5. Ulta Beauty (ULTA)
Sector: Specialty Retail | Bear Case Type: Market Share Loss & Channel Shift
Weak Bear Case:
"Competition from Sephora and Amazon is intensifying. Consumer spending is slowing."
Strong Bear Case:
"Thesis breaks if prestige beauty market share drops below 20%—lost share for the first time in company history in 2024. Amazon beauty grew 12% while Ulta grew sub-1%. Sephora at Kohl's added 900 doors—that's 900 locations where the 'Ulta or nothing' shopper now has an alternative within a mile. The defensive Marketplace launch signals management knows the DTC threat is real. Watching Q2 2026 Circana data: if Ulta loses another 100bps in prestige makeup share, the premium multiple compresses to peer levels (12-14x vs. current 16x). I'd exit below $350 on continued share losses, regardless of SSS."
Why it works: The candidate uses third-party data (Circana share), quantifies the competitive threat (900 Sephora at Kohl's doors), and separates market share from SSS—understanding that you can grow same-store sales while losing share in a growing market.
6. Lululemon (LULU)
Sector: Apparel / Athleisure | Bear Case Type: Geographic Concentration & Brand Fatigue
Weak Bear Case:
"Competition from Nike and Alo is increasing. The athleisure trend could slow."
Strong Bear Case:
"Thesis breaks if Americas comps stay negative for another two quarters—structural, not cyclical. Americas is 75% of revenue, and comps were down 4% in the most recent quarter. Management admitted the product assortment got 'stale'—that's not competition, that's execution failure. CEO Calvin McDonald departed. China grew 17%, but China can't save a broken Americas business at 25% of revenue. Tariff headwinds are $240-320M in 2025. The bull case requires a successful Americas product refresh, but the new innovation doesn't hit stores until H2 2026. If Q1 2026 Americas comps are still negative, the turnaround timeline extends 12+ months. I'd exit below $280 on that scenario."
Why it works: The candidate distinguishes between geographic segments (Americas vs. China), quantifies the tariff headwind, and identifies the specific catalyst timing (H2 2026 product refresh). The CEO departure is mentioned not as a generic risk but as context for why execution is uncertain.
7. Nike (NKE)
Sector: Footwear & Apparel | Bear Case Type: Share Loss & Turnaround Execution
Weak Bear Case:
"Nike faces competition from newer brands. China sales are weak. The turnaround will take time."
Strong Bear Case:
"Thesis breaks if running footwear share losses continue into H2 2026. Footwear revenue down 11%, Nike Digital down 20%, while Hoka grew 28% and On grew 32%. This isn't macro—Nike is losing the performance running consumer to brands that out-innovated them. New CEO Elliott Hill has the right pedigree, but the product pipeline doesn't ship until late 2026 (Vomero 18, Alphafly 4). That's 18 months of share loss before the fix arrives. Add $1.5B in tariff headwinds. Watching two metrics: (1) running footwear share in NPD data, and (2) Nike Direct traffic trends. If Nike loses another 200bps in performance running by Q2 2026, the turnaround extends to 2027. I'd exit below $65 on continued share losses, even if margins stabilize."
Why it works: The candidate knows the specific share loss data (Hoka +28%, On +32%), the product pipeline timing (late 2026), and uses third-party data (NPD) as a monitoring source. This isn't 'competition'—it's quantified share loss with a timeline for when the fix arrives.
The Pattern: 5 Elements of a Killer Bear Case
Look at what all seven strong examples have in common:
1. Specific VariableNot 'competition' but 'prestige beauty share' or 'NCO rate' or 'NDR'2. Quantified ThresholdNot 'if things get worse' but 'if NDR falls below 100%' or 'if unemployment hits 5%'3. Data SourceCircana, NPD, company filings, FDA announcements—something you can actually monitor4. TimelineWhen you'll know if you're wrong (Q1 2026, H2 2026, etc.)5. Exit TriggerA price or condition where you sell—not a hedge, an exit
Why This Matters
The bear case question isn't about showing you know the risks. Every candidate knows the risks—they're in the 10-K.
The bear case question is about showing you've thought about what would make you change your mind.
That's what separates analysts from researchers. Researchers find information. Analysts make decisions.
When you can articulate the specific variable, threshold, data source, timeline, and exit trigger, you're not just pitching a stock. You're showing how you think.
And that's what gets you hired.
If you want to see where you actually stand, let's talk.
stockpitchlab.com
Ryan J. Ross, CFA | Founder, Stock Pitch Lab
Former Co-CIO, McMorgan & Company | Manager, Morningstar 5-Star Rated Fund
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Ryan J. Ross, CFA
Founder, Stock Pitch Lab
