Earnings Per Share (EPS)

EPS = (Net Income − Preferred Dividends) / Weighted-Average Shares Outstanding. It is the denominator of the P/E ratio and the headline number in every quarterly earnings release.

Diluted EPS adjusts the share count to include convertibles, employee stock options, and warrants that could be exercised. It is always the more conservative figure and the one most analysts compare against consensus.

EPS growth year-over-year is a common screening filter, but a rising EPS without matching revenue growth often signals share buybacks rather than genuine operating improvement. Always pair it with revenue and margin trends.