Earnings Per Share.
In plain English
Earnings per share is a company's net profit divided by the number of shares outstanding, so it expresses profit on a per-share basis. It lets you compare profitability across companies of different sizes and track whether a business is growing its earnings over time. Analysts watch it closely because stock prices often move on whether reported EPS beats or misses expectations. On its own EPS says nothing about whether a stock is cheap; you pair it with the price to judge that.
01Why it matters
EPS is one of the most-watched numbers each earnings season, and understanding it helps you see past a headline beat or miss to what a company actually earns.
02The math, step by step
A company earns 100 million dollars and has 50 million shares. Its earnings per share is 100 million divided by 50 million, or 2 dollars per share.
03What this is NOT
Earnings per share is NOT what the company pays you. EPS is total profit per share; a dividend is the portion of profit actually paid out, which is usually much smaller or zero.