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CAGR Calculator: Measure Any Company's Real Growth Rate
Is this company actually growing — or is revenue flat? Enter a ticker to see revenue, net income, free cash flow, and stock price CAGR across 1, 3, 5, and 10-year periods. Get a cross-metric verdict that surfaces divergences most calculators miss.
Understanding CAGR for stock analysis
What is CAGR?
CAGR (Compound Annual Growth Rate) is the smoothed annual rate of return that takes you from a starting value to an ending value over a given number of years. The formula: CAGR = (End/Start)^(1/n) − 1, where n is the number of years.
Unlike simple averages, CAGR accounts for compounding — making it the standard metric for comparing growth rates across companies, time periods, and asset classes.
CAGR vs Average Return
Average annual return is the arithmetic mean of yearly returns. CAGR is the geometric mean. The difference matters when returns are volatile. If a stock gains 100% in year 1 then loses 50% in year 2, the average annual return is +25% — but your actual result is 0% (you're back where you started).
CAGR always reflects reality: the rate that, compounded annually, gets you from point A to point B. Use CAGR for any performance comparison.
What is a Good CAGR?
Context matters. Here are benchmarks for US equities:
| Benchmark | Typical CAGR |
|---|---|
| US GDP (nominal) | ~3–4% |
| S&P 500 (total return) | ~10% |
| Strong large-cap growth | 12–20% |
| Top growth stocks | 20%+ |
A company growing revenue at 15%+ CAGR for 5 years is rare and usually commands a premium valuation.
How to Use CAGR in Stock Analysis
CAGR is the starting point for growth assumptions in a DCF model. Look at the 3–5 year revenue or free cash flow CAGR, then apply a 20–30% haircut for conservatism — past growth doesn't guarantee future growth.
Compare multiple metrics: if revenue CAGR is 18% but net income CAGR is only 6%, margins are compressing. If stock price CAGR exceeds revenue CAGR, the market may be pricing in acceleration that hasn't materialized yet.
The Rule of 72
The Rule of 72 is a quick mental math shortcut: divide 72 by the annual growth rate to estimate doubling time. At 10% CAGR, an investment doubles in ~7.2 years. At 20%, it doubles in ~3.6 years. At 3% (GDP growth), it takes 24 years.
This is why compound growth is so powerful — and why even small differences in CAGR produce dramatically different outcomes over 10+ year horizons.
Limitations of CAGR
CAGR ignores volatility — it only cares about the start and end points. A company that grew smoothly at 15%/year and one that swung wildly but landed at the same endpoint have identical CAGRs. The smooth grower is a better business.
CAGR is also sensitive to endpoint selection. A cyclical company measured peak-to-trough looks terrible; trough-to-peak looks amazing. Always check multiple time horizons (1, 3, 5, 10yr) to spot this effect.
Frequently asked questions
How do you calculate CAGR?
CAGR = (Ending Value / Beginning Value)^(1/n) − 1, where n is the number of years. For example, if revenue grew from $100M to $200M over 5 years, CAGR = (200/100)^(1/5) − 1 = 14.9%.
What is a good CAGR for stocks?
The S&P 500 has delivered roughly 10% CAGR over long periods. Revenue CAGR above 15% is high-growth, 5–15% is moderate, and below 5% is slow. The best growth stocks sustain 20%+ for 5+ years.
CAGR vs average annual return — what's the difference?
Average return is the arithmetic mean; CAGR is the geometric mean that accounts for compounding. If a stock gains 100% then loses 50%, average return is +25% but CAGR is 0%. CAGR reflects your actual result.
What is the Rule of 72?
Divide 72 by the annual growth rate to estimate doubling time. At 10% CAGR, your investment doubles in ~7.2 years. At 20%, it doubles in ~3.6 years.
How do you use CAGR in a DCF model?
Use the 3–5 year revenue or FCF CAGR as your starting growth assumption, then apply a conservative discount of 20–30%. A company with 18% revenue CAGR might be modeled at 12–14% in your DCF.
Can CAGR be negative?
Yes. Negative CAGR means the value declined over the period. If revenue fell from $500M to $350M over 3 years, CAGR = −11.2%. Investigate whether the decline is cyclical or structural.
What is a good revenue CAGR?
Depends on company size: 8–12% is solid for large-caps, 12–20% is strong for mid-caps, and small-cap growth investors expect 20%+. Always compare to sector peers.
How many years should I use for CAGR?
3–5 years is standard. 1-year is too noisy. 10-year captures long-run trends but may not reflect the current business. Use multiple horizons side by side — accelerating, stable, or decelerating growth tells a story.