Revenue Growth (CAGR) Calculator

Quarter-to-quarter revenue growth can be wildly misleading. A company might report 40% growth one quarter because of an easy comparison and 5% the next because of a tough one — even though the underlying business is growing steadily at 20%. The compound annual growth rate (CAGR) cuts through this noise by smoothing revenue growth over multiple years into a single, comparable number.

Our Revenue Growth CAGR Calculator lets you instantly compute the annualized growth rate over any time period, making it easy to compare companies of different sizes and growth profiles on a level playing field.

Try It: Revenue Growth CAGR Calculator

Enter a starting revenue, ending revenue, and the number of years to calculate the compound annual growth rate. Experiment with different time horizons to see how growth rates change when you extend or shorten the measurement window.

What CAGR Tells You About a Business

CAGR is one of the most useful tools for evaluating growth because it answers a simple question: at what steady rate would revenue have had to grow each year to get from point A to point B?

• True underlying growth rate: By smoothing over multiple years, CAGR filters out one-time spikes, seasonal effects, and lumpy revenue recognition to reveal the real trend.
• Apples-to-apples comparison: A $1 billion company growing at 15% CAGR is directly comparable to a $50 million company growing at 15% CAGR — the growth rate normalizes for size.
• Sustainability signal: A 5-year CAGR that is significantly higher than the most recent year's growth may indicate the business is decelerating. Conversely, recent growth above the long-term CAGR suggests acceleration.
• Valuation anchor: Growth investors often use revenue CAGR as a key input for DCF models and price-to-sales comparisons. A stock trading at 10x sales with 30% CAGR looks very different from one at 10x sales with 5% CAGR.

How to Use CAGR in Practice

Here are practical guidelines for incorporating CAGR into your analysis:

• Compare 3-year and 5-year CAGRs. If the 3-year CAGR is significantly higher than the 5-year, the company is accelerating. If lower, it may be maturing or facing headwinds.
• Watch for unsustainable rates. Very few companies sustain revenue CAGR above 30% for more than 5 years. If the market is pricing in 40% growth for a decade, the expectations may be unrealistic.
• Pair CAGR with margin trends. Revenue growth is most valuable when margins are expanding alongside it. Growth that comes at the cost of profitability is less valuable to shareholders.
• Use sector-relative CAGRs. A 10% CAGR in healthcare software might be below average while 10% in consumer packaged goods is exceptional. Always compare within context.

Screen for High-Growth Stocks

Ready to find companies with strong and accelerating revenue growth? Start here:

• Screen for stocks with quarterly sales growth over 25% — companies delivering rapid top-line expansion right now.
• Layer on profitability filters to find the rare combination of high growth and healthy margins — the hallmark of truly great businesses.

CAGR is your best tool for seeing through noisy revenue data to find the companies that are genuinely compounding growth year after year.