Valuation Terms
Compound Annual Growth Rate
An annualized growth rate that smooths growth over multiple years.
Also called: CAGR
What it means
Compound annual growth rate, or CAGR, is the annual rate that would take a starting value to an ending value over a period if growth had happened at a steady rate each year. It smooths uneven real-world growth into one annual figure.
Why it matters
It helps users compare multi-year growth more cleanly than looking at raw beginning and ending values alone.