Growth Rate

Growth rate is a measure of how much a particular variable, such as revenue, earnings, or an asset's price, has increased or decreased over a specified period. It is typically expressed as a percentage and is used to evaluate performance and forecast future trends. In trading and investing, growth rates are applied to both individual companies and broader economic indicators.

A trader evaluating a technology stock might look at its year-over-year revenue growth rate to determine whether the company is expanding at an impressive pace. If a company grows revenue by 25% annually for several consecutive years, it may justify a premium valuation. In macroeconomic trading, GDP growth rates can also influence market direction — stronger-than-expected growth often supports equity markets and can lead to currency appreciation, while slowing growth may trigger risk-off sentiment across asset classes.