Analyze earnings per share growth trends, compute CAGR, PEG ratio, and project future EPS. Includes target price calculation and growth visualization.
Earnings Per Share (EPS) growth is the primary driver of long-term stock returns. Companies that consistently grow their earnings tend to see their stock prices appreciate over time, making EPS growth analysis essential for fundamental investors.
This calculator takes historical EPS data and computes the average growth rate, CAGR, and median growth. It also accounts for the impact of share dilution (from stock-based compensation) and buybacks on per-share earnings. The PEG ratio combines the P/E multiple with the growth rate to identify potentially undervalued growth stocks.
The target price feature lets you set a forward EPS estimate and target P/E multiple to calculate an intrinsic price target. The projected EPS table extends the historical CAGR forward to estimate future earnings, giving you a complete view of the earnings trajectory.
Use the preset examples to load common values instantly, or type in custom inputs to see results in real time. The output updates as you type, making it practical to compare different scenarios without resetting the page.
EPS growth is one of the clearest ways to connect business performance to shareholder outcomes. This calculator helps you separate headline earnings growth from per-share growth, incorporate dilution, and translate the earnings trend into a valuation framework.
YoY Growth = (EPS_t − EPS_{t-1}) / |EPS_{t-1}| × 100 CAGR = (EPS_last / EPS_first)^(1/n) − 1 PEG Ratio = P/E ÷ EPS Growth Rate Target Price = Forward EPS × Target P/E Multiple
Result: CAGR = 15%, Target = $120
EPS grew from $3.00 to $5.25 over 4 years — a CAGR of about 15%. At a forward EPS of $6.00 and target P/E of 20×, the target price is $120, implying 20% upside from the current $100 price.
A company can post attractive EPS growth for very different reasons: higher operating profit, lower share count, margin expansion, or a rebound from a weak base year. Looking at the growth rate together with dilution and valuation gives a more honest picture than EPS CAGR alone.
The PEG ratio is useful for comparing growth stocks, but it compresses a lot of judgment into one number. Cyclicality, one-time earnings swings, and changes in the capital structure can all make a low PEG look more attractive than it really is.
Projecting historical CAGR forward works best for stable businesses with relatively predictable economics. For cyclical or highly acquisitive companies, treat the forward EPS and target price outputs as scenario tools rather than as a single fair-value answer.
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This worksheet takes a user-entered EPS history, calculates year-over-year changes and compounded annual growth, and then combines those growth estimates with the entered stock price, forward EPS, dilution, and target P/E assumptions. The output is meant to connect per-share earnings trends to a rough valuation view rather than to produce a certified forecast.
Dilution and target-price results depend heavily on the assumptions entered on the page. For cyclical or acquisition-driven companies, projecting the historical CAGR forward can be misleading, so the result should be treated as a scenario tool rather than a prediction.
Above 10% annually is considered good for large caps. Growth stocks may achieve 20-30%+ but this is harder to sustain long-term.
PEG divides the P/E ratio by the EPS growth rate. A PEG below 1 suggests the stock may be undervalued relative to its growth.
Dilution from stock-based compensation increases share count, spreading earnings across more shares and reducing EPS growth even if total earnings grow. That is why net income growth and EPS growth can tell different stories.
CAGR is generally preferred as it accounts for compounding. Average growth can be distorted by one exceptional year.
Use the sector average P/E, the stock's historical average P/E, or a DCF-implied multiple. Be conservative with high-growth assumptions.
Projections based on 3-5 years of historical data are reasonable for stable businesses. Cyclical or high-growth companies have wider projection uncertainty.