Investing term

What is Earnings per share (EPS)?

Net income ÷ shares outstanding. The 'per-share slice' of the company's profit.

Earnings per share (EPS) is a company's net income divided by its number of shares — the slice of profit attributable to each share. It's the headline number markets react to each quarter and the denominator's partner in the P/E ratio. Watch for share buybacks, which can lift EPS by shrinking the share count even when total profit is flat.

For example

A company earning $100M with 50M shares has an EPS of $2 — and if it buys back shares, EPS can rise even without earning a dollar more.

Earnings per share (EPS) is taught hands-on in Stage 15 — Valuation for Investors.

See the lesson →

Related terms

Book valueTotal assets minus total liabilities — the accounting net worth of the business.DCF (discounted cash flow)Estimate intrinsic value by adding up the present value of every future cash flow the business produces.Discount rateThe annual rate used to translate future dollars back into today's dollars in a DCF.Dividend yieldAnnual dividend per share ÷ share price. The cash income the stock pays out as a percentage of price.
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