Why Future Growth Rates Matter More Than Past Performance

Some people think that looking at how a company has grown in the past isn’t very important. What really matters is how much they will grow in the future. This future growth can change, and that’s why it’s important to be sure about those growth numbers. If a company’s future earnings growth is guessed too high, the stock might seem like a good deal when it really isn’t. On the other hand, if growth is guessed too low, investors might think a stock is too expensive when it isn’t. As we get ready for the Q4 earning season, using the right growth measures becomes crucial.