CAGR

Compound annual growth rate — the steady yearly rate that turns a starting value into an ending one.

CAGR answers a simple question: if growth had been perfectly smooth, what annual rate would take you from the beginning value to the ending value? An investment that goes from $10,000 to $20,000 in seven years has a CAGR of about 10.4%, regardless of how bumpy the ride was. It's the honest way to compare investments over different periods — and a favorite tool of marketers, who choose flattering start dates. Always ask what window a CAGR is measured over.

The company touted a 25% revenue CAGR over five years, conveniently starting the clock at its pandemic low.