Earnings Per Share (EPS) Calculator
Calculate basic EPS, diluted EPS, P/E ratio, and EPS growth rate.
Essential for evaluating a company's profitability and stock valuation.
Why EPS Matters
Earnings Per Share is the single most important profitability metric in fundamental stock analysis. It tells you how much profit a company generates for each share outstanding — making it directly comparable across companies of different sizes.
Wall Street analysts forecast EPS quarters in advance. When a company beats EPS estimates, the stock often surges. When it misses, it often drops — even if the absolute profit was high. The surprise is what moves prices.
The Formulas
Basic EPS: Basic EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Common Shares
Diluted EPS: Diluted EPS = (Net Income − Preferred Dividends) ÷ (Weighted Avg Shares + Dilutive Securities)
Dilutive securities include stock options, warrants, and convertible bonds — instruments that could become shares and dilute existing shareholders.
P/E Ratio (Price-to-Earnings): P/E = Stock Price ÷ EPS
EPS Growth Rate: EPS Growth = (Current EPS − Prior EPS) ÷ |Prior EPS| × 100
Forward P/E: Forward P/E = Stock Price ÷ Expected Next-Year EPS
P/E Ratio Interpretation Table
| P/E Range | Typical Profile |
|---|---|
| Below 10x | Deep value or declining business |
| 10x – 15x | Value stocks, mature industries |
| 15x – 20x | Market average (S&P 500 historical ~18–20x) |
| 20x – 30x | Quality growth companies |
| 30x – 50x | High-growth stocks (tech, biotech) |
| 50x+ | Speculative growth or turnaround plays |
Basic vs Diluted EPS
Basic EPS uses only shares currently outstanding. Diluted EPS assumes all options, warrants, and convertible securities are exercised — giving a more conservative, “worst case” picture.
Professional investors always prefer diluted EPS. A large gap between basic and diluted EPS signals heavy dilution risk from employee stock options or convertible debt.
GAAP vs Non-GAAP EPS
Companies often report two EPS figures:
- GAAP EPS includes all expenses (stock comp, restructuring, amortization).
- Non-GAAP EPS strips out “one-time” items, making profits look higher.
Always compare apples to apples — GAAP to GAAP across companies.
Worked Example (Apple-style)
- Net income: $100 billion
- Preferred dividends: $0
- Weighted average shares: 15.8 billion
- Dilutive securities (options): 0.2 billion
- Stock price: $185
- Prior year EPS: $5.80
Basic EPS = $100B ÷ 15.8B = $6.33 Diluted EPS = $100B ÷ 16.0B = $6.25 P/E Ratio = $185 ÷ $6.33 = 29.2x EPS Growth = ($6.33 − $5.80) ÷ $5.80 × 100 = +9.1%
At 29.2x P/E with ~9% EPS growth, this is a quality company trading at a premium multiple — typical of large-cap tech with dominant market position.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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