What does the acronym EPS stand for in stock analysis?

In stock analysis, EPS stands for earnings per share.

EPS measures the portion of a company’s profit attributable to each outstanding share of common stock. A basic version is commonly calculated by subtracting preferred-stock dividends from net income and dividing the result by the weighted average number of common shares outstanding during the period.

Analysts use EPS to compare profitability across reporting periods and to calculate valuation measures such as the price-to-earnings ratio. A rising EPS can indicate improving profitability, but it does not automatically mean a stock is cheap or attractive: share prices, debt, growth expectations, and accounting choices also matter.

Basic EPS uses existing common shares, while diluted EPS includes potential shares from instruments such as stock options, warrants, and convertible securities. Dilution usually lowers the reported per-share figure, showing what earnings might look like if those securities became shares.