Fundamentals
EPS (Earnings Per Share)
A company's net profit divided by its number of outstanding shares — a core measure of profitability per share.
Example
A company with $50 million in net profit and 10 million shares outstanding has an EPS of $5 per share.
Common Misconception
EPS growth driven by share buybacks (fewer shares outstanding) can look identical to EPS growth driven by real profit growth — the two aren't the same thing for the health of the underlying business.
Why It Matters
EPS is the denominator in the P/E ratio, so understanding it is a prerequisite to using P/E for valuation comparisons between stocks.