Definition:

1-year Revenue per Share Growth Rate measures the percentage increase or decrease in a company's revenue per share over a one-year period. It provides insight into how effectively a company is growing its revenue relative to its outstanding shares.

Formula:

((Revenue per Share at End of Year - Revenue per Share at Start of Year) / Revenue per Share at Start of Year) * 100

How to use the metric:

Investors and analysts use this metric to assess a company's growth performance. A positive growth rate indicates that the company is increasing its revenue relative to its share count, which can be a sign of effective management and business expansion. It is often used in conjunction with other financial metrics to evaluate a company's overall financial health and growth potential.

Limitations:

This metric does not account for changes in the number of shares outstanding due to stock splits, buybacks, or issuances, which can affect the revenue per share figure. It also does not consider profitability or cost efficiency, focusing solely on revenue growth. Additionally, it may not provide a complete picture for companies with seasonal revenue fluctuations.

Applies to:

This metric is useful across various industries, particularly those where revenue growth is a key indicator of success, such as technology, consumer goods, and retail.

Doesn't apply to:

Industries with highly volatile or cyclical revenues, such as commodities or utilities, may not find this metric as useful. In these sectors, revenue can be heavily influenced by external factors like market prices or regulatory changes, which may not reflect the company's operational performance.

Summary:

The 1-year Revenue per Share Growth Rate is a valuable metric for assessing a company's revenue growth relative to its share count over a year. While it provides insights into growth performance, it should be used alongside other metrics to gain a comprehensive understanding of a company's financial health. Its applicability varies across industries, with some sectors finding it more relevant than others due to the nature of their revenue streams.