How to Interpret Acceleration
Acceleration is one of the most powerful signals in fundamental analysis — signaling that a company’s earnings or revenue growth is speeding up, not just improving.
MarketAlpha automatically calculates and highlights acceleration in the Earnings Table using background colors, helping you confirm momentum or catch early trend shifts.
What Is Acceleration?
Acceleration refers to an improving growth rate over time. It applies to both EPS (Earnings Per Share) and Sales growth.
For example:
- If EPS growth improves from 10% → 18% → 24% over 3 quarters
- Or if it declines, then reverses upward over 2 consecutive quarters
These patterns signal that business performance is not just strong — it’s improving faster, often preceding stock outperformance.
How Acceleration Is Calculated
A green background highlights acceleration when one of the following is true:
-
Consistent 3-period increase in growth
Example: 6% → 12% → 18% = acceleration -
U-shaped recovery (dip followed by 2-period increase)
Example: 20% → 10% → 16% → 24% = acceleration
A red background indicates deceleration when the opposite patterns are true:
- Consistent 3-period decline in growth
- Inverted-U shape (rise then 2-period decline)
This applies to both Quarterly and Annual views in the Earnings Table.
Why It Matters
- Acceleration often precedes institutional accumulation, as funds seek companies with improving earnings momentum
- It can confirm price action and volume breakouts, helping validate trade setups
- It helps you avoid false positives — strong growth that’s actually slowing down
- It makes it easier to find early-stage growth trends or confirm the sustainability of high growth
You’ll see acceleration used across MarketAlpha filters, strategy logic, and earnings visualizations.
Practical Example
Let’s say you see the following in the quarterly EPS row:
| Q1 | Q2 | Q3 |
|---|---|---|
| 12.5% | 19.3% | 24.1% |
Q3 cell would be shaded green to indicate earnings acceleration.
If instead you see:
| Q1 | Q2 | Q3 |
|---|---|---|
| 23.1% | 17.2% | 10.5% |
Q3 cell row would be shaded red, showing deceleration.
Where to Use It
Acceleration detection is available:
- In the Earnings Table on all Alpha Charts
- As a filter or column in the Screener
- In many AI-based strategies, which require momentum confirmation
Use acceleration to quickly find the strongest and most reliable growth trends — or to avoid setups where growth is fading.
Summary
Acceleration highlights positive inflection points in a company’s financial performance. MarketAlpha auto-detects these moments using clear background cues, helping you zero in on high-momentum names without manual calculations. Whether you're trading earnings setups or scanning for breakout potential, acceleration helps validate what matters most — forward growth velocity.