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Updated 1mo ago.
Updated 1mo ago.
Net earnings divided by the number of shares outstanding. It's the share of profit attributable to each share. Trailing EPS uses the last 12 months; forward EPS estimates the next 12. Steady EPS growth is often a quality signal; volatile EPS signals a cyclical sector or problems.
A company earning $200M net profit with 100M shares posts EPS of $2 ($200M ÷ 100M). At a $40 stock price, its price-to-earnings ratio is 20.
EPS is the most-watched profit measure. Its year-over-year growth shows whether the business is getting more profitable. It's also the denominator of the P/E ratio. Watch for EPS inflated by share buybacks rather than real profit growth.