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QuestionsCategory: Financials QuadrantDiluted EPS growth
Zhi Ming Cheah asked 4 years ago

1st question
Is Diluted EPS growth an important indicator that should be use by itself or it should only be use in PEG ratio?

2nd question
3 possible scenario:
1) a company with no eps growth
2) a company with steady eps growth
3) a company with negative eps growth
what does this 3 scenario tells about this company? or again, need to check it alongside with its price to find the PEG ratio?

1 Answers
Victor Chng answered 4 years ago

Hi Zhi Ming,

  1. The EPS growth is to give you an indication on how fast the company is growing in the past. Whether it will continue to grow the same you need to analyse the company growth potential. Yes you can use it with PEG.
  2. The ideal case to to look for company in scenario 2 but it does not means that scenario 1 & 3 you should avoid. For scenario 1 & 3, you still can make money out of it by just paying the right valuation.