Long-term investing

Revenue growth

Defined in 2 lessons · Updated October 17, 2026

Definition

(Revenue this period − revenue in the same period a year earlier) ÷ the earlier revenue. $130 million against $100 million a year before is 30% growth.

Example

Say company XYZ, a retailer, reports $90 million of revenue in its fourth quarter, against $75 million in the same quarter a year earlier: growth of 20%. Compared with the third quarter’s $60 million it would look like 50%, but holiday shopping lifts every fourth quarter, which is why growth is measured against the same period a year before.

Hypothetical numbers, for illustration only.

Two company cards: Company A, P/E 40 and growth 40%, gives a PEG of 1.0; Company B, P/E 20 and growth 5%, gives a PEG of 4.0; a note reads PEG = P/E ÷ growth rate.

Also defined in

How to Pick Growth Stocks: A 7-Step Process With Examples→ Step 2: Read the numbers: growth, acceleration, margins, guidance, debt

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