What is EPS?
EPS means earnings per share, a measure of how much profit belongs to each share of a company's stock.
The short version
EPS is earnings per share. It is usually calculated as net income available to common shareholders divided by the number of shares. Investors use it to compare profit per share and to calculate valuation ratios like P/E.
Basic vs. diluted
Basic EPS uses current shares. Diluted EPS includes potential shares from options, convertibles, or other instruments. Diluted EPS is often more conservative because it accounts for possible share count expansion.
Why EPS changes
EPS can rise because profits grow, costs fall, taxes drop, or share buybacks reduce the share count. It can fall because earnings weaken, margins compress, or new shares are issued.
Adjusted EPS
Companies often report adjusted EPS that excludes certain costs or gains. Adjustments can be useful for one-time items, but investors should check whether exclusions are recurring or flattering the story.
What to compare
Compare EPS with revenue growth, cash flow, margins, debt, buybacks, share dilution, and guidance. EPS quality matters as much as the headline number.