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Financial Glossary

Earnings Per Share (EPS)

Net income divided by the number of outstanding shares.

What Is Earnings Per Share (EPS)?

EPS represents the portion of a company's profit allocated to each share of common stock. It's the building block for the P/E ratio and one of the most watched metrics in earnings reports. 'EPS beats' and 'EPS misses' drive stock price reactions.

Formula

EPS = (Net Income - Preferred Dividends) / Weighted Average Shares Outstanding

Why It Matters

Growing EPS is one of the strongest drivers of long-term stock price appreciation. Diluted EPS accounts for stock options and convertible securities, giving a more conservative view.

Related Terms

P/E Ratio (Price-to-Earnings)Profit Margin (Net Margin)

See This Metric in Action

Our DVR Score evaluates earnings per share (eps) alongside 50+ other metrics to give you one clear picture.

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