EPS (Earnings Per Share) = Net Profit / Number of Shares Outstanding. The fundamental number — drives stock price more than any other metric. Higher EPS = more profitable company.
📊 Types
- Basic EPS: simple calculation
- Diluted EPS: includes stock options, convertibles — more conservative, preferred by analysts
- TTM EPS: trailing 12 months — smooths seasonal
🎯 Growth Rate
- EPS growth > 20%/year = growth stock
- 5+ years of consistent growth = quality compound