5Y Revenue Growth (CAGR)
Five-year Revenue Growth tells an investor the average yearly pace at which a company’s sales have grown or shrunk over five fiscal years.
How it is calculated
(Revenue ÷ Revenue 5 fiscal years earlier)^(1/5) − 1
Shown as 0 when both values are negative.
- Unit
- Percent
- Periods
- Annual
- Source
- Calculated by stockrow from the inputs below
- Made from
- Revenue
Reading 5Y Revenue Growth (CAGR)
How to read it
This is the compound annual growth rate of revenue: the latest annual revenue divided by revenue 5 fiscal years earlier, raised to the power of 1/5, minus 1. It gives the steady yearly rate that would carry the old figure to the new one. The value rises when the latest revenue is high relative to the starting year, and falls when the starting year was strong or recent sales have slipped. It is worked out from annual figures only.
What is typical
Young companies and those in expanding markets tend to show high rates, while mature businesses in established industries often grow in line with the wider economy or not at all. Companies that sell commodities can show large swings depending on where prices stood at each end of the window. Compare the value with the median for the company’s sector.
Pitfalls
Only the two endpoints count; everything in between is ignored, so a single unusual year at either end can make the rate look far better or worse than the path the company actually took. Acquisitions and disposals change revenue without any change in the underlying business. stockrow shows the value as zero when both revenue figures are negative, so a zero does not always mean revenue was flat.