valuation
Tracked on R40
EPS Earnings Per Share
Net income divided by the number of outstanding shares. How much profit each share of stock "earns."
Formula
EPS = Net Income / Shares Outstanding
How to Interpret
Rising EPS is bullish. But watch for share buybacks inflating EPS — a company can boost EPS by buying back shares even with flat net income. Always check if EPS growth comes from real earnings growth or financial engineering.
Why It Matters
EPS is what Wall Street obsesses over every earnings season. Beating or missing EPS estimates by even a penny can move stock prices 5-10%. It's the bridge between company performance and stock valuation (via P/E).
Example
A company earning $600M with 300M shares outstanding reports EPS of $2.00 ($600M ÷ 300M). Each share represents $2.00 of profit.