Earnings per share
I love watching Alphabet's EPS climb higher and higher.
|EBT||Earnings before taxes|
|ISO||Incentive stock option|
|NSO||Non-qualified stock option|
|NQSO||Non-qualified stock option|
|CEO||Chief executive officer|
|CFO||Chief financial officer|
|FAANG||Facebook, Amazon, Apple, Netflix, Google|
|NYSE||New York Stock Exchange|
EPS, or earnings per share, is a measurement of a company's profit in comparison to its share price. Investors and financial analysts use a company's EPS to help them decide whether purchasing the company's stock is a good investment.
To calculate a company's EPS, you divide the company's net income (minus dividends) by its number of outstanding shares. The higher a company's EPS is, the more profitable it is (in most cases). However, while comparing companies' EPSes can be useful when selecting investments, it should not be the sole basis of your investment decision.