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GrowthWC TO#91

EPS CAGR 5Y

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EPS CAGR 5Y measures the rate at which the business is expanding. Value investors to size durable revenue and free cash flow expansion when EPS CAGR 5Y aligns with the rest of the VMCI 120-indica.

Javier Sanz, Founder & Lead Analyst at ValueMarkers
By , Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz

Formula

Revenue / Average Working Capital

Description

Measures how efficiently working capital (current assets minus current liabilities) generates revenue. Higher turnover means the company needs less working capital per dollar of revenue, which frees up cash for other purposes.

Interpretation

Above 4 is generally efficient. Very high working capital turnover may indicate the company is operating with minimal cushion. Negative working capital turnover (from negative working capital) can actually be a sign of strength in certain business models.

Related metrics: Revenue Growth 1Y, Revenue CAGR 3Y. (Updated 2026)

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Further Reading

FAQ

How is EPS CAGR 5Y calculated?+
EPS CAGR 5Y uses the formula: Revenue / Average Working Capital. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using Multi-year SEC filings + Damodaran growth-rate datasets.
What is a good EPS CAGR 5Y value by sector?+
There is no single 'good' value for EPS CAGR 5Y — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for EPS CAGR 5Y on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use EPS CAGR 5Y?+
Peter Lynch, Philip Fisher, Bill Miller cite EPS CAGR 5Y as a key input to to size durable revenue and free cash flow expansion. The academic anchor is Mauboussin's 'measuring the moat' framework. ValueMarkers weights this within the Growth pillar of the VMCI score (12% of total).
What are the limitations of EPS CAGR 5Y?+
EPS CAGR 5Y can mislead in high growth at unsustainable unit economics (cash-burn traps). Pair EPS CAGR 5Y with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live EPS CAGR 5Y data?+
Visit any /stock/[ticker] page on ValueMarkers to see live EPS CAGR 5Y data, sector percentiles, and the VMCI composite score that integrates EPS CAGR 5Y with 119 other indicators across 100,000+ stocks. The free /screener exposes EPS CAGR 5Y as a filterable column.

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