Earnings per share (EPS)

Definition

Earnings per share (EPS) is a financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability. It is derived by dividing the net earnings available to common shareholders by the number of outstanding shares.

Related terms

Net Income: The total profit of a company after all expenses and taxes have been deducted from revenue.

Dividends: A portion of a company's earnings distributed to shareholders as a reward for their investment.

Price: to-Earnings Ratio (P/E) - A valuation metric comparing a company’s current share price relative to its per-share earnings, used by investors to evaluate if a stock is over or undervalued