Earnings Per Share Growth Calculator
Calculate earnings per share (EPS) growth rate and compound annual growth rate (CAGR) to analyze a company's earnings growth trajectory and future potential.
EPS Growth Analysis
Growth Results
CAGR:
0.00%
Total Growth:
0.00%
Annual Growth Rate:
0.00%
Future Projections
Future EPS:
$0.00
Growth Multiple:
0.00x
Projected CAGR:
0.00%
Business Insights
Growth Quality:
N/A
Sustainability:
N/A
Investment Potential:
N/A
Understanding EPS Growth
Earnings per share (EPS) growth is a critical metric for investors as it indicates how quickly a company's profitability is increasing on a per-share basis. Consistent EPS growth is often a sign of a healthy, growing company.
CAGR Calculation
Compound Annual Growth Rate
- CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Number of Periods) - 1
- Measures smooth growth rate over time
- Accounts for compounding effect
- Standardized measure for comparisons
Why CAGR Matters
- Eliminates volatility effects
- Allows fair comparisons
- Shows long-term trend
- Used in valuation models
EPS Growth Analysis
Growth Metrics
Key indicators of EPS performance
Historical Growth
- Year-over-year EPS changes
- Compound annual growth rate (CAGR)
- Consistency of growth
- Comparison to industry peers
Future Projections
- Analyst EPS forecasts
- Expected growth rates
- Forward P/E calculations
- Valuation multiples
Growth Quality Assessment
High Quality Growth
- Consistent year-over-year increases
- Supported by revenue growth
- Positive operating cash flow
- Sustainable business model
Low Quality Growth
- Volatile or erratic growth
- Driven by cost-cutting
- Share buybacks inflating EPS
- One-time gains
Industry Growth Benchmarks
| Industry | Typical EPS CAGR | Growth Drivers |
|---|---|---|
| Technology | 15-25% | Innovation, market expansion |
| Healthcare | 8-15% | Demographics, new treatments |
| Consumer Goods | 5-10% | Brand strength, market share |
| Utilities | 2-5% | Stable demand, regulation |
EPS Growth in Valuation
PEG Ratio
- Price-to-Earnings Growth ratio
- P/E ratio divided by EPS growth rate
- Accounts for growth in valuation
- Lower PEG suggests better value
Growth Investing
- Focus on high EPS growth companies
- Accept higher P/E ratios
- Long-term capital appreciation
- Higher risk tolerance
Key Takeaways for EPS Growth
- CAGR provides a smoothed measure of EPS growth over time
- Consistent EPS growth indicates a healthy, growing company
- Compare EPS growth rates to industry benchmarks
- Quality of growth matters more than quantity
- EPS growth is used in valuation models like PEG ratio
- Future EPS projections help in investment planning
- Growth should be supported by revenue and cash flow increases
- Historical growth patterns can inform future expectations