DEFINITION of 'Sequential Growth'

A measure of a company's short-term financial performance that compares the results achieved in a recent period to those of the period immediately preceding it. In financial reporting, sequential growth often compares the results between two quarters. A company might be reported to have experienced 3% sequential sales growth - this means that its revenue has increased by 3% since the previous quarter.

BREAKING DOWN 'Sequential Growth'

When considering how much weight to place on reports of sequential growth (or the lack thereof), it is important to keep in mind that seasonal fluctuations often affect a company's short-term performance.





A major retailer might report 10% sequential growth in the fourth quarter, then see a relative decline in revenue in the first quarter of the following year. This would not necessarily indicate that the business is performing poorly - it could simply be the result of increased consumer spending during the holiday spending followed by a return to normal spending in the new year. It is important to look at a variety of indicators to get an accurate picture of a company's performance.

RELATED TERMS
  1. Quarterly Revenue Growth

    An increase of a company's sales when compared to a previous ...
  2. Symmetrical Triangle

    A chart pattern used in technical analysis that is easily recognized ...
  3. Year Over Year - YOY

    A method of evaluating two or more measured events to compare ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  5. Comparable Store Sales

    The amount of revenue a retail location generated in the most ...
  6. Quarter On Quarter - QOQ

    A measuring technique that calculates the change between one ...
Related Articles
  1. Investing

    MCLOX: BlackRock Global Allocation Fund Performance Case Study

    Explore the performance of the BlackRock Global Allocation Fund since 2012, including a summary of how currency fluctuations affected yearly returns.
  2. Investing

    What's a Quarter?

    A quarter, often abbreviated “Q,” is a consecutive three-month period that a company uses to report its earnings and dividends.
  3. Investing

    FDGRX: Fidelity Growth Company Performance Case Study

    Explore the market-beating returns of the Fidelity Growth Company since 2012, as well as the seasonal patterns when share prices rise and fall.
  4. Investing

    What Is Year Over Year?

    Year over year measures performance in one time period versus performance in a previous time period.
  5. Investing

    Revenue Projections Show Profit Potential

    Examining how a company makes money can offer clues about its earnings potential.
  6. Investing

    Analyzing Retail Stocks

    To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
  7. Investing

    PID: An ETF Performance Case Study

    Explore the performance of the PowerShares International Dividend Achievers ETF since 2012 and the role that energy prices play in the fund's yearly returns.
  8. Trading

    Stock Analysis Basics: How To Forecast Revenue and Growth

    Forecasted revenue and growth projections are important components of security analysis, leading to a stock’s future worth.
  9. Insights

    A Rough 2Q Earnings Season Ahead for Investors

    The S&P 500 companies probably will post their sixth straight quarter of negative revenue growth and fourth straight quarter of falling profits
  10. Managing Wealth

    How to Use Earnings Season to Make Better Decisions

    Earnings season reflects the state of the stock market, but also demonstrates how the overall economy is performing.
RELATED FAQS
  1. Why would you look at year-over-year rather than quarterly growth?

    Find out why year-over-year growth analysis is more common than quarterly growth analysis in stock valuation and why investors ... Read Answer >>
  2. When does Q2 start for most companies?

    Learn about the fiscal year of different companies and when the second quarter begins. Explore why analysts often prefer ... Read Answer >>
  3. What is the first day of the quarter?

    Learn when the first day of the quarter is. Explore why investors and analysts prefer to compare results year-over-year due ... Read Answer >>
  4. What level of annual growth is common for companies in the Internet sector?

    Learn what level of annual growth is common for companies in the Internet sector in terms of revenue growth and earnings ... Read Answer >>
  5. What is the difference between a quarter and a year in finance?

    Examine the difference between a fiscal quarter and a fiscal year. Learn why investors examine both quarterly and annual ... Read Answer >>
  6. What is the first day of the first quarter?

    The first day of companies' fiscal years varies based on industry cycles. The timing is especially important because annual ... Read Answer >>
Hot Definitions
  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  2. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  3. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  4. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  5. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  6. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
Trading Center