EPS Growth Rate Calculator
Calculate earnings per share growth rate over any time period.
Find CAGR of EPS and project future EPS to evaluate a stock on fundamental growth trajectory.
EPS Growth Rate (CAGR)
Earnings Per Share (EPS) growth rate measures how quickly a company is increasing its profitability on a per-share basis. It is calculated as a Compound Annual Growth Rate (CAGR), meaning the annualized rate that would take EPS from the starting value to the ending value over the period.
Formula:
EPS CAGR = (EPS_end / EPS_start) ^ (1 / years) - 1
What EPS is:
EPS = Net Income / Diluted Shares Outstanding
Why per-share matters: A company can grow net income by issuing more shares — but that dilutes existing shareholders. EPS growth captures whether earnings are growing relative to the shares you own.
Typical EPS growth benchmarks:
| Growth Rate | Category |
|---|---|
| < 5% | Slow — utilities, mature defensives |
| 5% – 10% | Moderate — established blue chips |
| 10% – 20% | Good — strong growth companies |
| 20% – 35% | Excellent — high-growth phase |
| 35%+ | Very high — verify sustainability |
EPS growth and PEG ratio: EPS growth rate is the denominator in the PEG ratio (P/E ÷ growth rate). A stock trading at P/E 30 with 30% EPS growth has a PEG of 1.0 — generally considered fairly valued.
Limitations:
- EPS can be manipulated via share buybacks — fewer shares makes EPS grow even if profits are flat
- One-time items (asset sales, write-downs) distort EPS — use adjusted EPS when available
- Negative base year EPS makes the formula unreliable
Projecting forward EPS:
Future EPS = Current EPS × (1 + growth rate) ^ years
This calculator computes both the historical CAGR and projects future EPS at that rate.