◈ GLOSSARY · INVESTING
EPS (Earnings Per Share).
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
EPS is the company's net profit divided by the number of shares outstanding. It's the slice of last year's profit attributable to one share of stock. Diluted EPS — which counts shares that could exist if options and convertibles were exercised — is the more conservative number and the one most analysts cite.
◈ IN PRACTICE
Example
A company earns $500 million in net income and has 250 million diluted shares outstanding. Diluted EPS is $2.00. If the stock trades at $50, the P/E is 25.
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