Stock CAGR Calculator
Calculate the compound annual growth rate of a stock investment over multiple years.
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Understand this calculation
CAGR expresses the constant annual compounded rate that would connect a beginning value to an ending value over a specified number of years.
Formula
Worked example
Growing from $1,000 to $1,610.51 over five years corresponds to a CAGR of approximately 10%.
How to interpret the result
CAGR is useful for comparing investments held for different lengths of time, but it smooths the path and does not show volatility.
Assumptions & limitations
The calculation assumes a positive beginning value and does not account for intermediate cash flows unless those are already reflected in the values.
Practical context
When this calculator is useful
CAGR is useful when an investment has been held for more than one year and you want a single annualized growth rate that connects the beginning and ending values. It makes investments with different holding periods easier to compare.
How investors commonly use it
Investors use CAGR to summarize long-term growth in share price, portfolio value, revenue, earnings or dividends. It is often paired with total return and volatility because the same CAGR can arise from very different paths.
What CAGR does not tell you
CAGR smooths the entire period into one constant annual rate. It hides drawdowns, volatility, interim cash flows and the sequence of returns, so it should not be read as the return actually earned in each individual year.