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Earnings per share (EPS)

Earnings per share allocates a company's profit or loss available to common shareholders across a weighted average number of common shares.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: Earnings per share allocates a company's profit or loss available to common shareholders across a weighted average number of common shares.[1][2]

How the term is used

Basic and diluted EPS answer different questions. Diluted EPS considers potential common shares from instruments such as options or convertible securities when their inclusion is dilutive.[2]

What to check before relying on it

Check the accounting period, continuing versus discontinued operations, share-count changes, one-time items, and whether a figure is GAAP or a company-defined adjusted measure.

Example

Net income can rise while EPS falls if the weighted average share count increases faster, which is why the numerator and denominator both matter.

Price-to-earnings ratio (P/E)StockShare class

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. Investor.gov: Earnings Per Share — the basic earnings-per-share definition. Accessed October 24, 2026.
  2. FINRA: Financial Performance Metrics Every Investor Should Know — basic and diluted earnings per share, valuation ratios, and their use in company comparisons. Accessed October 24, 2026.