Stocks with higher earnings-per-share growth rates are generally more desired by investors than those with slower earnings-per-share growth rates, though in general high growth rates have a tendency to revert over the longer term to more stable growth rates. One of the important differences vs net-income growth rates is that EPS growth reflects the dilution that occurs from new stock issuance, the exercise of employee stock options, warrants, convertible securities, and share repurchases.

One of the key contributing factors to stock price appreciation is the forecast rate of earnings growth.

Accelerating earnings growth and broker forecast upgrades have also been cited by many investment experts such as Bill O'Neil as critical factors in their investment models. This is measured on a rolling basis and earnings are diluted and normalised.