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Glossary
Profit & cash

EPS

Earnings per share

Net profit divided by the number of shares, which is your slice of it.

EPS matters because it is per share, and the share count moves. A company can grow total profit while EPS falls, if it issued a lot of new shares along the way. You would be poorer despite the company being bigger.

Always use diluted EPS, which counts the shares that will exist once options and convertible instruments are exercised. Basic EPS flatters companies that pay staff in stock, which is most technology companies.

The formula
Diluted EPS = Net income ÷ Fully diluted share count
Figure

What you actually own

Founders50%
Institutions30%
Other investors15%
You5%

A share is a slice of the whole company: its profits, its assets and its votes. Your slice is small, and it is a real claim, not a bet on a ticker.

Why it matters

It is the numerator of your actual return, and the denominator of the P/E ratio.

The mistake everyone makes

Watching EPS growth without watching the share count. Buybacks can manufacture EPS growth from a business that is not growing at all.

Related terms

P/E ratio
How many years of current profit you are paying for the shares.
Dilution
Your slice shrinking because the company issued more shares.
Share buyback
The company buying its own shares and cancelling them.

See EPS on a real company

SteadyShares pulls this straight from the filings for 1,100+ companies, alongside moat scores, DCF fair value and peer comparison. Free to look around.

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