EPS (Earnings Per Share)
A company's net income divided by shares outstanding — "the profit one share earned." The denominator of PER.
In plain terms
If a company earns $100M a year and has 10M shares, it earned $10 per share. That $10 is EPS (earnings per share).
It is the company's total profit sliced by the share count into "how much my one share earned." It is the foundational concept used as the denominator of PER, which gauges whether a price is expensive or cheap.
What it tells you
EPS converts company profit to "one shareholder's eye level." Even if total net income rises, if lots of new stock was issued the per-share share (EPS) may not rise, so EPS shows real profit growth from a shareholder's view.
What an "earnings surprise" in the news compares is usually this EPS. When actual EPS beats the market's expected EPS, it is a surprise.
Formula
EPS = net income ÷ shares outstanding (diluted) EPS (TTM) = sum of last 4 quarters' net income ÷ shares outstanding (diluted)
What high or low means
Rising EPS means the profit one share earns has grown. Steady EPS growth is the foundation for shareholder value stacking up.
A single quarter's EPS can spike on one-off items, so reading it on a TTM basis (summing the last 4 quarters) is more stable.
EPS can rise not because "profit grew" but because "the share count shrank." When a company buys back and retires stock, the denominator (share count) falls and EPS rises. When EPS rises, you have to tell whether net income itself grew or it was a smaller-share-count effect (Stocklore's context reading flags this "source of EPS growth").
Basic EPS and diluted EPS differ. Diluted EPS is a conservative value that assumes stock options and convertibles all turn into shares, counting more shares. At companies with heavy stock compensation the gap between the two is large (this dictionary uses the diluted basis).
The "adjusted EPS" a company reports is computed excluding some costs and can look better than the accounting-standard EPS. You need to check which EPS is meant.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see EPS and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.