EPS.
In plain English
EPS stands for Earnings Per Share. It is a company's net income for a period (usually a quarter or full year) divided by its average shares outstanding. EPS is the single number Wall Street watches every quarter when earnings reports come out. Companies that beat the expected EPS often see their stock rise; ones that miss often fall sharply in after-hours trading.
01Why it matters
EPS is the building block of valuation: the P/E ratio is just price divided by EPS. EPS growth over time is one of the strongest historical drivers of stock returns, and stagnant EPS often signals a business that has stopped growing even if the stock has not yet noticed.
02The math, step by step
Apple reported about $93.7 billion in net income and $6.08 in diluted EPS for fiscal year 2024 (roughly 15.4 billion diluted shares). The stock traded around $230 that year, putting the P/E at roughly 38.
03What this is NOT
EPS is profit per share, after costs and taxes. Revenue per share is gross sales per share before any expenses. A company can grow revenue while EPS falls if costs grow faster.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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