Forward Revenue Growth: formula and how to read it

How much analysts expect sales to grow in the next fiscal year. Analysts' consensus revenue for the fiscal year the company reports next (even if that year has just ended) compared with the revenue of its latest reported fiscal year. It is a forecast, not a result, and moves with every analyst revision; revenue forecasts are usually steadier than profit forecasts.

Stock Meadow groups it under Growth, and shows it in tables as Fwd rev. growth.

Forward revenue growth = (analysts' consensus revenue for the next fiscal year − last reported fiscal year's revenue) ÷ last reported fiscal year's revenue

A company that sold $800 million in its last reported fiscal year and is expected to sell $900 million in the next has forward revenue growth of (900 − 800) ÷ 800 = 12.5%. The numbers are made up for illustration.

A higher figure means analysts expect sales to grow faster. Compare it with the company's recent revenue growth: expected growth well above the recent record deserves scepticism, and expected growth below it can be an early sign of a slowdown.

When Stock Meadow ranks stocks, a higher figure scores better.

• It is a forecast and moves with analyst revisions.
• Acquisitions and disposals change revenue without any change in the underlying business, and forecasts do not always include them.
• "Next fiscal year" means the year the company reports next, which can already have ended.
• Blank when no analyst covers the company, or when the analysts' figure for last year and the reported revenue are too far apart to compare (for example statements and forecasts in different currencies).

How Stock Meadow handles gaps. Usually blank when no analyst forecast covers the company, or the forecast and last year's reported revenue are too far apart to compare (for example statements and forecasts in different currencies). Extreme values are capped at 1000%+.

Treat any single metric as one clue, and read the company's financial statements before drawing a conclusion. Stock Meadow's figures are research tools based on reported data, not investment advice.

In Weighted ranking, Z-score composite and Balanced (no weak link), you choose the metrics and weights yourself, so you can include it in a custom score.

No fixed-recipe model scores it.

Read about every scoring model on the scoring models page.

• Revenue Growth: how fast sales grew last year.
• Forward EPS Growth: how much analysts expect profit per share to grow in the next fiscal year.
• Price-to-Sales Ratio (P/S): what you pay for each dollar of sales.

What is forward revenue growth?

It is the sales growth analysts expect for the company's next fiscal year, compared with the last year it reported.

Why look at revenue growth as well as earnings growth?

Profit can be moved around by accounting and one-off items, while sales are harder to flatter. Expected revenue growth shows whether the business is expected to expand, and expected earnings growth shows whether that growth is expected to be profitable.

Is a higher or lower Fwd rev. growth better?

When Stock Meadow ranks stocks, a higher figure scores better. That is a ranking convention, so read Fwd rev. growth alongside other measures and compare similar companies.

Why is Fwd rev. growth blank for some stocks?

It is usually blank when no analyst forecast covers the company, or the forecast and last year's reported revenue are too far apart to compare (for example statements and forecasts in different currencies). Stock Meadow leaves the figure blank rather than guessing it.