What is EPS?
Earnings Per Share: a company's net profit divided by outstanding shares.
Formal Definition
Earnings Per Share (EPS) measures profitability on a per-share basis, calculated by dividing net income (less preferred dividends) by the weighted-average outstanding share count. EPS is the denominator of the P/E ratio and a primary input to most equity valuation models. Analysts distinguish trailing EPS (reported) from forward EPS (estimated).
In Simple Terms
It slices a company's total yearly profit into a per-share number, so you can see how much each single share earned. Rising EPS over time generally means the business is getting more profitable.
Example
A company with $10 billion in net income and 2 billion shares outstanding reports EPS of $5.