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EPS: profit sliced per share

Take the year's profit and divide it between every share that exists. Your slice is earnings per share.

It exists so you can compare a giant with a minnow, and so you can see whether profit per owner is growing — not just profit in total.

Watch for share count. A company issuing lots of new shares can grow profit while EPS stays flat, because the pie is being cut into more pieces.

Remember

EPS is profit per slice — it grows when the company grows and the slices don't.

See a real example

Compare Nvidia, AMD and Intel

Same industry, wildly different earnings paths.

What this shows

Chipmakers live and die on cycles. When one is compounding earnings and another is shrinking, the market treats them as different species.

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