Calculate year-over-year EPS growth rate from previous and current earnings per share to track profitability momentum.
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Earnings Analysis
EPS growth measures how fast a company's per-share earnings are expanding or contracting between periods, providing a key signal for profitability momentum and valuation.
Consistent EPS growth indicates improving profitability. Declining EPS may signal margin compression, revenue loss, or dilution from new share issuance.
Analysts use EPS growth alongside P/E and PEG ratios to assess whether a stock's valuation is justified by its earnings trajectory.
Percentage change from previous to current period.
EPS Growth = (Current EPS − Previous EPS) / |Previous EPS| × 100
Uses absolute value of previous EPS as denominator to handle turnaround scenarios correctly.
Previous EPS = 4.00, Current EPS = 5.00. Growth = (5 − 4) / 4 × 100 = 25%.
Single-period growth can be misleading. Look at multi-year CAGR for a more reliable trend. EPS can be inflated by share buybacks even without revenue growth.
Frequently asked questions
Usually, but context matters. Growth from share buybacks (fewer shares, same earnings) is different from organic profit growth. Check revenue growth alongside EPS growth.
The calculator uses absolute value of previous EPS, so a move from -2 to -1 shows 50% improvement. But transitioning from negative to positive EPS is qualitatively different and should be interpreted carefully.
At least 3–5 years to identify a sustainable trend. Single-year growth can be driven by one-time items. Multi-year CAGR is more reliable.
PEG = P/E / EPS Growth Rate. Fast EPS growth can justify a high P/E. The PEG ratio normalises valuation by growth speed.
Related
These related calculators come from the same leaf category, nearby sibling categories, or the same top-level topic.
Calculate basic and simplified diluted EPS from net income, preferred dividends, weighted average common shares, and optional additional diluted shares.
Calculate the PEG ratio from the P/E multiple and expected earnings growth rate to evaluate whether a stock's valuation is justified by its growth prospects.
Calculate trailing or forward price-to-earnings ratio from share price and positive EPS, with the matching earnings yield.
Calculate the maximum sustainable growth rate a company can achieve using only retained earnings, from return on equity and retention rate.
