EPS
Your share of the company's profit. It's what drives the P/E ratio. Always check "diluted" EPS, which accounts for stock options that could create new shares.
Why it matters
The bridge between company-level profitability and per-share economics. It's what determines your share of the profits. EPS growth drives stock prices more than almost any other metric.
How to read it
Always use diluted EPS (includes stock options and convertible debt). Compare EPS growth to revenue growth — if EPS grows faster, it may be buyback-driven. Buybacks funded by excess free cash flow can be sustainable. The concern is debt-funded buybacks that inflate EPS while weakening the balance sheet. Analysts obsess over EPS "beats" and "misses" relative to consensus estimates.
Lessons that use this term
Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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