EPS Growth Rate

PE or Price to Earnings Ratio is the easiest way to tell whether a company's stock is cheap or expensive. A higher than average PE means that the broad market expects the company to grow faster than the industry average. But how fast exactly?

This app calculates the Earnings per Share (EPS) Annualised Growth rate of a company with known PE. The Expected Growth Rate is calculated for a range of investment payback periods (5-30 years). The Investor is free to choose a payback period according to the underlying macroeconomic environment and his/her risk appetite.

The Expected Growth Rate of EPS can be considered as the rate at which the broad market expects the company's profits to grow in the future. The Higher the payback period the lower is the expected growth rate.