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Valuation

EPS (Earnings Per Share)

A company's net income divided by its outstanding shares.

In depth

EPS measures profitability on a per-share basis, allowing comparison across companies of different sizes. "Diluted EPS" includes the dilutive effect of stock options and convertible securities. "Adjusted" or "non-GAAP" EPS strips out one-time items management deems non-recurring. Beat/miss vs. analyst consensus drives short-term stock moves.

Example

Company with $1B in profit and 200M shares outstanding has EPS of $5.

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