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EPS Growth Calculator
Analyze earnings per share growth trends, compute CAGR, PEG ratio, and project future EPS. Includes target price calculation and growth visualization.
Enter 3-10 years of EPS, oldest to newest
Stock-based compensation dilution
Effective share reduction from buybacks
Average EPS Growth⧉
15.02%
Mean year-over-year EPS growth rate
EPS CAGR⧉
15.02%
Compound annual growth rate of EPS
Net Adjusted Growth⧉
15.17%
Growth adjusted for dilution and buybacks
Current P/E⧉
19.0×
Stock price ÷ trailing EPS
Forward P/E⧉
16.7×
Stock price ÷ next year EPS estimate
PEG Ratio⧉
1.27
P/E ÷ EPS growth — under 1 may signal undervaluation
Target Price⧉
$120.00
Forward EPS ($6.00) × Target P/E (20×)
Implied Return⧉
20.0%
Upside/downside to reach target price
EPS Growth Trend
Yr 1
15.0%
Yr 2
15.1%
Yr 3
14.9%
Yr 4
15.1%
Historical EPS & Growth
| Period | EPS | YoY Growth | Cumulative |
|---|---|---|---|
| Year 0 | $3.00 | — | 0.0% |
| Year 1 | $3.45 | 15.0% | 15.0% |
| Year 2 | $3.97 | 15.1% | 32.3% |
| Year 3 | $4.56 | 14.9% | 52.0% |
| Year 4 | $5.25 | 15.1% | 75.0% |
| Year 5 (proj) | $6.04 | 15.0% | — |
| Year 6 (proj) | $6.95 | 15.0% | — |
| Year 7 (proj) | $7.99 | 15.0% | — |
| Year 8 (proj) | $9.19 | 15.0% | — |
| Year 9 (proj) | $10.57 | 15.0% | — |
Planning notes, formulas, and examples
About the EPS Growth Calculator
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.
When This Page Helps
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.
How to Use the Inputs
- Enter historical EPS values as a comma-separated list (oldest to newest, 3-10 years ideal).
- Enter the current stock price for P/E and PEG calculations.
- Enter the consensus forward EPS estimate for next year.
- Set a target P/E multiple (industry average or your own estimate).
- Adjust share dilution and buyback yield for dilution-adjusted growth.
- Review growth metrics, PEG ratio, target price, and projected EPS schedule.
Formula used
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 MultipleExample Calculation
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.
Tips & Best Practices
- Look for consistency — steady 15% growth is more predictive than volatile spikes.
- Adjust for share dilution to see the true per-share earnings trajectory.
- A PEG under 1 with consistent growth is a strong value signal.
- Compare your target price with analyst consensus to calibrate your assumptions.
- Watch for one-time items inflating EPS — use adjusted/operating EPS for cleaner analysis.
Growth Quality Matters
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.
PEG Is A Shortcut, Not A Verdict
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.
Be Careful With Projections
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.
Sources & Methodology
Last updated:
Methodology
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.
Sources
- Earnings Per Share (EPS) (Investor.gov) — SEC investor-education glossary entry defining earnings per share.
- Price-earnings (P/E) Ratio (Investor.gov) — SEC investor-education glossary entry describing the price-earnings ratio.
- Glossary: Valuation (Investor.gov) — SEC investor-education glossary entry covering valuation as an estimate, not a market guarantee.
Frequently Asked Questions
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.
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