Using Growth Targets To Supplement Growth Strategy Disclosure

The increase in initial public offering (IPO) activity in 2017 saw an increase in the use of "growth targets" – forward-looking information about a company's medium- to long-term financial and operating results – to supplement the company's growth strategy disclosure. The quality of a company's growth strategy and management's track record for achieving growth can significantly impact the success of an IPO as well as ongoing share price performance. Institutional investors are demanding more information and a greater level of detail from companies with respect to their growth plans, especially in the case of new public companies. The use of growth targets can be helpful because they quantify the impact of growth plans from management's perspective, providing greater visibility into the company's performance in the future.