Earnings per share (EPS) is a company's profit divided by the number of its shares outstanding. It distils total profit down to a per-share figure, making it easy to compare profitability across companies of different sizes and to track a single company over time.
EPS is the "E" in the price-to-earnings ratio, so it sits at the heart of stock valuation. Rising EPS over several years points to a growing, profitable business; erratic or falling EPS is a warning to look closer at why.
The figure can be massaged, though. Companies can flatter EPS by buying back shares — shrinking the denominator — rather than by genuinely earning more, and one-off items can distort a single quarter. Read it as a trend, in context, not as a single number.
Worked example
A company earning $1 billion with 500 million shares outstanding has EPS of $2.00.
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This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.