20 Companies With Stunning Earnings Per Share Growth

Financial success starts at the top. This metric highlights that companies are growing sales much faster than their stock count.

_{By William BaldwinSenior Associate}

---

IN

what makes a growth stock? The first thing most investors look at is earnings per share. But there’s a reason you should give equal attention to revenue growth. More specifically, you want companies whose revenue per share is growing at an impressive exponential rate.

The winners in this roundup include Wall Street favorites like Tesla, Block (parent of the Square payment network) and Meta Platforms (Facebook). Ahead of them in the rankings are lesser-known names: Cheniere Energy, which exports liquefied natural gas; Alnylam, a loss-making but highly promising developer of RNA-based drugs; and MercadoLibre, a Latin American e-commerce platform that’s heavily traded on the Nasdaq.

Some smart investors focused on the best lines of companies. One of them was Charles Allmon (1921–2015), whose long-term Growth Stocks Outlook newsletter featured a half-dozen stocks that rose more than 10,000% when they were on the recommendation list. In an interview with Forbes on the occasion of his retirement at age 87, Allmon explained his philosophy. “Over the long term, a company can’t grow faster than its sales,” he said. “I look at sales first, then at earnings, and then at the balance sheet.”

Yes, earnings growth matters a lot and is assessed in our earnings growth review (see list of stories at the bottom). But here we only consider revenue, not what companies get out of it.

The sorting is done by earnings per share growth because earnings growth enabled by dilution of the stock base does not offer much benefit to investors. Example: International Flavors & Fragrances, which makes chemicals for food flavors and perfumes, looks pretty good in terms of total revenue, better than tripling it over the past decade. But it has tripled the number of shares in that period. Earnings per share growth is an unimpressive 3% per year.

Compare that to Oracle Corporation, which sells enterprise database software. It uses its profit center to reduce its share count through buybacks. So while Oracle’s total revenue grew just 3%, its earnings per share grew 10%.

The analysis began with 1,614 companies from the FactSet database that operate in the United States, have a market capitalization greater than $1 billion, and report revenues and shares outstanding for at least 10 of the 12 years from 2013 to 2024 (the last year is a forecast).

The long-term growth number is the result of an exponential fit to the earnings per share history. Predictability measures how closely that history tracks the exponential line (the statistic’s coefficient of determination), with a penalty for skipped years. The top 10% of the group in predictability is labeled “Very High,” the next 15% “High,” the next 15% “Above Average.”

Among large companies with “above average” or better predictability, 20 companies stand out, with revenues per share increasing by 22%–58%:

---

---

Two names you might expect don’t quite make the cut: Amazon.com and Alphabet (aka Google). Both do come in second, though. This list is limited to large companies with growth rates above 18% and very high predictability:

---

---

The final list is a collection of earnings disappointments. It includes a hapless utility (formerly Pacific Gas & Electric), a good company in a shrinking industry (Artisan Partners, active management), a phone company that wasn’t sure whether to diversify into content (AT&T) and two more foolish speculations (GameStop and AMC Entertainment).

---

---

Revenue and share count statistics used as input are from FactSet, price-to-earnings ratios from YCharts. Conclusions on growth rates are the author’s. The calculations use the estimated number of shares as of December 2024, which is an extrapolation of the recent trend in shares outstanding.

MORE FROM FORBES

Forbes12 Fast and Stable Growth Stocks for SeptemberBy William BaldwinForbesMarket Lessons: Comparing Price to Sales as a Value Indicator—With 20 Cheap StocksBy William BaldwinForbesMarket Lessons: Measuring Debt — With 16 Cash-Plenty CompaniesBy Segun OlakoyenikanForbesMarket Lessons: What Free Cash Flow Tells You — With 16 Cheap StocksBy Segun OlakoyenikanForbesMarket Lessons: Shareholder Profit – Take a Chance and Invest in These 16 Stocks Beyond DividendsBy Segun Olakoyenikan