To calculate the Compound Annual Growth Rate (CAGR) of a stock share price, you can use the following formula:

where:

• V_f is the final value (ending share price after the period of interest).
• V_i is the initial value (starting share price).
• n is the number of years.

Divide the final value by the initial value. Take the result and raise it to the power of one divided by the number of years. Subtract one from this result to get the CAGR.

Example Calculation

Suppose you want to calculate the CAGR of a stock share price that was $100 five years ago and is $180 today.

• Initial share price (V_i): $100
• Final share price (V_f): $180
• Number of years (n): 5

Using the formula:

So, the stock's share price grew at a compound annual growth rate of approximately 12.47% over the five-year period.