Current Qtr and Next Qtr Growth

Models
1

What is the correct way to calculate Current Qtr Growth and Next Qtr Growth vs. the same qtr a year ago? Thanks.

2

Using Sales as an example, use:

GR%PYQ("Sales")

for current quarter relative to the prior year quarter.

That’s historical. I would use EPSActual to compare estimates:

100*(CurQEPSMean-HistQ4EPSActual)/HistQ4EPSActual

and

100*(NextQEPSMean-HistQ3EPSActual)/HistQ3EPSActual
3

Thanks. I wasn’t absolutely certain what version of HistQ(3 or 4) aligned to the prior year for current quarter. Thanks again.

4

When calculating EPS or income growth, you always need to add “abs” before the denominator or you’ll get the wrong numbers for companies with negative EPS in those historical quarters. You should also add a maximum to prevent crazy numbers for when EPS is 0 or 0.01 or -0.01. If you want to use GAAP numbers rather than the “corrected estimates,” you’d use EPSExclXor(3,Qtr) for CurQEPSMean and EPSExclXor(2,Qtr) for NextQEPSMean. So, for example, the best formula, in my opinion, for current quarter’s EPS growth over same quarter last year is
(CurQEPSMean-EPSExclXor(3,Qtr))/Max(0.05,Abs(EPSExclXor(3,Qtr))). Some would argue that using analyst estimates for the current quarter and GAAP numbers for last year’s is comparing apples to oranges. I do it anyway, because I enjoy comparing apples to oranges. But I also adjust for special items, which is another ball of wax.

5

Thanks. That is really helpful!