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Definition: The EPS is the total profits of a company divided by the number of shares. A company with $1 billion in earnings and 200 million shares would have earnings of $5 per share.
StockJargon Advice: A good way to determine whether or not a company is growing is by looking at their earnings per share now compared to previous years. For example, if a company has $5.00 EPS this year and $4.00 EPS last year, we would say that their earnings grew 25%.
It's also important to remember that if a company issues more shares of stock, it "dilutes" the EPS figures. So investors are usually not happy when companies announce secondary offerings. Unless, of course, the money the company raises will be put to use well.
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