Earnings per share (EPS)
Profit divided by the number of shares. Diluted EPS also counts options and convertible shares that could become stock.
Worked example · a round-number company
Net income$500M÷Shares200M=EPS$2.50How to read it
↑Higher is better. Growth over several years matters more than any single year.
Keep in mind
- Buybacks lift EPS even when profit is flat.
- Stock splits change it; compare on the same share basis.