I?ve calculated your averages using a database of more than 1,600
NASDAQ stocks with market values of less than $200 million. Please
keep in mind that most of those companies are unprofitable, and as
such a growth rate for operating profits cannot be calculated. Only
39% of the companies had usable profit data for 12-month profit
growth, and only 33% had usable data for five-year growth. So I also
calculated growth in EBITDA, earnings before interest, taxes,
depreciation, and amortization. EBITDA is more likely to be positive
than operating earnings, so I was able to get a larger sample (54% for
12-month growth and 45% for five-year growth).
One other concern was company age. Some of the small companies are
relatively new, and as such have little historical data. As such, the
sample size used to calculate the average declines from the 12-month
to the three-year period, then declines again for the five-year
period. For sales, 88% of the companies had 12-month data, 85% had
three-year data, and 83% had five-year data.
Regarding data quality, the average is not necessarily the best way of
assessing growth. One penny stock that goes for $0.01 to $2.00 can
skew an average of 1600 stocks. Because the averages for sales,
profit, and EBITDA growth are reflect the performance of a few
outliers, I?ve also provided median growth rates. The disparity
between median and average growth rates is particularly noticeable in
the 12-month data. By definition, half of the companies grew faster
than the median rate, and half grew more slowly.
The data is below.
12-Mo. 12-Mo. 12-Mo. 3-Year 3-Year 3-Year 12-Mo. 12-Mo. 12-Mo.
Sales Profit EBITDA Sales Profit EBITDA Sales Profit EBITDA Growth
Growth Growth Growth Growth Growth Growth Growth Growth
Average 45% 198% 75% 8% 19% 15% 9% 6% 8%
Median 8% 12% 9% 4% 9% 7% 5% 4% 6%