Barth et al. [1] and Bao and Bao [5] Shows that increasing earnings firms have higher price- earnings multiple (P/E). This study investigates the applicability of their results to Tehran’s Stock Market (TSM), which has different Institutional and investor characteristics. Results show that earnings of increasing earning firms have higher persistence than those of other firms. Analaysis of variauce (ANOVA) is also performed to examine the differences in firms Characteristics. Increasing earnings firms tend to have higher net income to total assets, operating income to total assets market value of equity to total debts, and long term debts to total assets ratios.