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.

Fórmula

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

Exemplo

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.

Por Que Importa

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.

Como o MiniValuator Usa 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.

Na Prática

Termos Relacionados

  • 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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