Earnings Per Share (EPS)

Earnings Per Share (EPS) is a company's net income divided by its weighted average number of outstanding shares. It measures the profit allocated to each share of common stock and is a widely referenced figure in stock valuation.

Formule

EPS = (Net Income - Preferred Dividends) / Weighted Average Shares Outstanding

Exemple

A company with $500M net income and 250M shares outstanding has an EPS of $2.00. If the P/E ratio is 25x, the implied share price is $50.

Pourquoi C'est Important

EPS is one of the most widely followed financial metrics in stock valuation. It directly connects to the P/E ratio, the most common relative valuation method. However, EPS can be manipulated through accounting choices and share buybacks.

Comment MiniValuator Utilise Earnings Per Share (EPS)

While MiniValuator primarily uses free cash flow for DCF, EPS data is displayed alongside other fundamental metrics when auto-filling stock data.

En Pratique

Termes Connexes

  • P/E Ratio (Price-to-Earnings) The Price-to-Earnings (P/E) ratio is a relative valuation metric that compares a company's current s...
  • Free Cash Flow (FCF) Free Cash Flow (FCF) is the cash a company generates from its core business operations after funding...
  • Intrinsic Value Intrinsic value is the estimated true worth of an asset based on its fundamental economic characteri...

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