Back to Glossary
Earnings per Share (EPS)
Valuation & Fundamentals
Net income for the period (after any preferred dividends) divided by the weighted average number of shares outstanding.
It shows how much profit falls to a single share and is the denominator of the P/E ratio. It is the most watched number on earnings day: the market compares the reported figure with analysts' expectations.
Example
A company with net income of $1 billion and an average of 500 million shares outstanding has EPS of $2.
Related Terms
7 Links
More in the Guide