What is growth investing?

Growth investing focuses on companies that are expected to grow revenue, earnings, or cash flows faster than the market. Instead of emphasizing current valuation metrics alone, growth investors look for businesses with strong expansion potential, scalable economics, and durable competitive advantages.

How does this screener evaluate growth stocks?

This screener projects revenue per share and earnings per share (EPS) forward using your growth assumptions. It incorporates a reinvestment rate to reflect how much earnings are plowed back into the business, then estimates an implied valuation using a terminal multiple. The result is a growth profile and an implied value per share.

What is the reinvestment rate?

The reinvestment rate is the percentage of earnings that the company reinvests into growth initiatives rather than paying out as dividends. Higher reinvestment rates can support faster future growth, but they also reduce immediate cash returns to shareholders.

Does this tool guarantee future performance?

No. All projections are based on user-provided assumptions. Real-world results can differ significantly due to competition, macroeconomic conditions, management decisions, and many other factors. This tool is for education and planning, not a guarantee of future performance.

Can I compare multiple growth stocks?

Yes. You can run the screener for one stock at a time, export the growth schedule, and repeat the process for other tickers. Comparing growth profiles, reinvestment rates, and implied valuations can help you build a watchlist of potential growth opportunities.

Should I use price-to-sales or price-to-earnings for the terminal multiple?

For early-stage or low-profit companies, price-to-sales (P/S) can be more stable than price-to-earnings (P/E). For mature growth businesses with consistent profitability, P/E may be more informative. The screener lets you choose which metric to emphasize via the terminal multiple input.

Growth Investing Screener

Evaluate growth stocks using revenue and earnings expansion, reinvestment, and implied valuation. Enter your assumptions to see a forward growth profile, an estimated value per share, and a classification of the stock’s growth style.

Ticker symbol Current share price Current revenue per share Current earnings per share (EPS)

Expected annual revenue growth (%) Expected annual EPS growth (%) Reinvestment rate (% of earnings) Required rate of return (discount rate, %)

Growth horizon (years) Terminal price-to-sales multiple Terminal price-to-earnings multiple Screen label

Tip: Use realistic growth rates and reinvestment assumptions. Extreme numbers can make any stock look attractive on paper.

Important: This screener uses simplified growth and valuation formulas based on user-provided assumptions. It does not pull live market data and does not constitute investment advice. Use it as an educational tool and cross-check your analysis with multiple sources before making any investment decisions.

Growth investing screening formulas

The growth investing screener focuses on how revenue and earnings expand over time, how much of those earnings are reinvested, and what valuation the market might assign in the future. It uses a simplified forward projection model to estimate an implied value per share and classify the stock’s growth profile.

1. Revenue growth projection

Revenue growth rate (decimal) = Expected annual revenue growth (%) ÷ 100

Projected revenue per share in year n:
  Revₙ = Rev₀ × (1 + Revenue growth rate)ⁿ

Rev₀ is the current revenue per share. Each year, revenue is grown by your chosen rate. This creates a forward revenue path that helps contextualize earnings growth and valuation multiples.

2. EPS growth and reinvestment

EPS growth rate (decimal) = Expected annual EPS growth (%) ÷ 100
Reinvestment rate (decimal) = Reinvestment rate (%) ÷ 100

Projected EPS in year n:
  EPSₙ = EPS₀ × (1 + EPS growth rate)ⁿ

Reinvested earnings in year n:
  Reinvestₙ = EPSₙ × Reinvestment rate

EPS₀ is the current earnings per share. The reinvestment rate represents the portion of earnings used to fuel future growth. While the model does not explicitly feed reinvestment back into growth, it surfaces how much of earnings is being retained versus potentially paid out.

3. Discount rate and present value factor

Discount rate (decimal) = Required rate of return (%) ÷ 100

Present value factor for year n:
  PV factorₙ = 1 ÷ (1 + Discount rate)ⁿ

The discount rate reflects the risk you perceive in the growth story. Higher discount rates reduce the present value of future earnings, acknowledging uncertainty and volatility common in growth stocks.

4. Terminal valuation using price-to-sales and price-to-earnings

Terminal price-to-sales multiple = PS
Terminal price-to-earnings multiple = PE

Terminal revenue per share in final year N:
  Rev_N = Rev₀ × (1 + Revenue growth rate)ᴺ

Terminal EPS in final year N:
  EPS_N = EPS₀ × (1 + EPS growth rate)ᴺ

Terminal value candidates:
  TV_PS = Rev_N × PS
  TV_PE = EPS_N × PE

Chosen terminal value (simplified blend):
  TV = (TV_PS + TV_PE) ÷ 2

Discounted terminal value:
  DTV = TV × PV factor_N

The screener blends price-to-sales and price-to-earnings perspectives to estimate a terminal value. This is especially useful for growth companies where profitability may lag revenue expansion.

5. Implied value per share

Implied value per share:
  Value = Σ (EPSₙ × PV factorₙ for n = 1 to N) + DTV

For simplicity, the model treats discounted EPS as a proxy for discounted cash flows to shareholders. Adding the discounted terminal value yields an implied value per share that you can compare to the current price.

6. Growth classification

Average annual EPS growth ≈ EPS growth rate (%)

Classification (simplified):
  If EPS growth ≥ 20% → "Aggressive growth"
  If 10% ≤ EPS growth < 20% → "Balanced growth"
  If EPS growth < 10% → "Conservative growth"

These thresholds are not rigid rules but helpful anchors. They give you a quick sense of whether your assumptions describe a high-octane growth story or a more measured trajectory.

Together, these formulas create a transparent framework for thinking about growth investing. They do not capture every nuance of business dynamics, but they help you connect growth assumptions to valuation and risk in a structured way.

How to use the growth investing screener

Growth investing is about more than chasing the hottest tickers. At its best, it’s a disciplined search for companies that can expand revenue and earnings for many years, supported by strong economics and competitive advantages. This screener helps you translate your view of a growth story into numbers, so you can see how assumptions about expansion and reinvestment connect to valuation.

Start with core fundamentals

Begin by entering the ticker symbol, current share price, revenue per share, and earnings per share (EPS). These inputs anchor the model in the company’s current scale and profitability. If you’re working with early-stage businesses, revenue per share may be more informative than EPS, especially when profits are thin or volatile.

Using reliable data sources—such as company filings or reputable financial platforms—helps keep your analysis grounded. Avoid guessing numbers; small errors in starting values can compound over long horizons.

Set realistic growth assumptions

Next, enter expected annual revenue growth and EPS growth. These are the heart of the growth story. For high-growth companies, it can be tempting to plug in very high rates, but remember that few businesses sustain extreme growth indefinitely. Consider the company’s history, market size, competition, and product pipeline when choosing your numbers.

One practical approach is to model a base case with moderate growth, then run separate scenarios with higher and lower rates. This gives you a range of outcomes and helps you see how sensitive valuation is to your assumptions.

Understand reinvestment and discount rates

The reinvestment rate represents how much of earnings the company plows back into growth initiatives—research and development, marketing, new capacity, acquisitions, and more. High reinvestment can support future expansion, but it also means less cash returned to shareholders in the near term.

Your required rate of return (discount rate) reflects both the risk of the company and your personal expectations. Growth stocks often carry higher uncertainty, so many investors use higher discount rates than they would for stable, mature businesses. A higher discount rate reduces the present value of future earnings and terminal value, making your analysis more conservative.

Choose a horizon and terminal multiples

The growth horizon determines how many years you project revenue and EPS. Common choices range from 5 to 10 years. Longer horizons can capture more of the growth story but also introduce more uncertainty. The terminal price-to-sales (P/S) and price-to-earnings (P/E) multiples represent what you think the market might pay for the company at the end of the horizon.

For early-stage growth companies, P/S may be more stable than P/E, especially when profits are still ramping. For more mature growth businesses with consistent earnings, P/E can be a better anchor. The screener blends both perspectives to estimate a terminal value, giving you a more balanced view.

Interpreting the results

When you click Calculate Growth Screen, the tool computes an implied value per share, compares it to the current price, and classifies the growth profile as aggressive, balanced, or conservative based on your EPS growth assumption. It also generates a year-by-year schedule showing projected revenue per share, EPS, reinvested earnings, discounted EPS, and terminal value.

If the implied value per share is significantly above the current price and your growth assumptions are realistic, the stock may warrant deeper research. If the implied value is below the current price, the market may already be pricing in optimistic expectations—or your assumptions may be too conservative. Either way, the screener gives you a structured starting point.

Worked example

Imagine a company with revenue per share of $40 and EPS of $2.50, trading at $75. You assume 20% annual revenue growth, 18% EPS growth, a 70% reinvestment rate, a 12% discount rate, a 10-year horizon, a terminal P/S of 4, and a terminal P/E of 25. The screener projects revenue and EPS forward, calculates reinvested earnings, discounts EPS, and blends terminal values based on both multiples.

If the implied value per share comes out around $90, the current price of $75 suggests some upside—but only if the company can deliver on those growth assumptions. Adjusting the growth rates or discount rate will quickly show how sensitive the valuation is to changes in your view.

Practical tips

Run multiple scenarios (base, optimistic, conservative) to understand the range of possible valuations.
Compare your terminal multiples with historical averages for the company and its sector.
Use the CSV export to build a watchlist of growth candidates and track how your assumptions evolve over time.
Remember that growth stories can change quickly—update your inputs as new information emerges.
Combine quantitative analysis with qualitative research on products, management, competition, and industry trends.

Growth investing rewards patience and discipline. This screener is designed to support that discipline by making your assumptions explicit, showing how they translate into numbers, and helping you avoid decisions based solely on hype or short-term price moves.

Frequently Asked Questions

Is this screener suitable for early-stage startups?

It can provide a rough framework, but early-stage startups often have highly uncertain revenue and earnings paths. For such companies, qualitative analysis and scenario planning may be more important than any single valuation model. Use this tool as one lens among many.

What if EPS is very low or volatile?

For companies with thin or volatile profits, revenue-based metrics like price-to-sales can be more informative. The screener includes both P/S and P/E in the terminal value calculation to balance these perspectives, but you should still interpret results cautiously.

How should I choose growth rates?

Look at historical growth, industry trends, and the company’s competitive position. Avoid extrapolating short-term spikes into long-term assumptions. Many investors prefer to use growth rates that are lower than management’s most optimistic guidance.

Does reinvestment automatically increase growth in the model?

In this simplified version, reinvestment is reported but not directly fed back into the growth rates. Instead, it serves as a diagnostic: high reinvestment with modest growth may raise questions about capital efficiency, while strong growth with reasonable reinvestment can be a positive sign.

Is this tool a recommendation to buy or sell?

No. The screener is for education and planning. It does not consider your full financial situation, risk tolerance, or portfolio context. Always do your own research and consider consulting a qualified advisor before making investment decisions.

Can I export the growth schedule?

Yes. Use the Export CSV button to download the year-by-year schedule, including projected revenue per share, EPS, reinvested earnings, discounted EPS, and terminal value. You can analyze it further in a spreadsheet or share it with a coach or advisor.