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What is EPS (Earnings per Share)?

Earnings per share (EPS) is a measure of relative value because it represents the amount of income attributable to each share of stock, and that becomes especially clear when we compare trailing 12 month EPS data over time as we do in our EPS Graphs.

Here is how EPS is calculated:

EPS = Net Earnings /Shares Outstanding.
Earnings per share is calculated by dividing the income attributable to common shareholders by the total number of shares outstanding for the period in question. For example, if a company earned $100 and that was the income attributable to common shareholders, and they had 100 shares of stock outstanding, the EPS would be $1.00.

Often, the relative value of a stock's price is calculated using earnings per share from a combined trailing 12 month period. More often, and in most financial portals, the earnings per share is calculated on a yearly basis and compared year over year to define earnings growth from one year to the next.