Earnings Per Share (EPS)

EPS = (Net Income − Preferred Dividends) / Weighted-Average Shares Outstanding. It's the denominator of the P/E ratio and a top-line item in every quarterly earnings release.

Diluted EPS adjusts the share count for convertibles, stock options, and warrants — it's the more conservative number.

EPS growth year-over-year is a common screening filter; a rising EPS without a corresponding rise in revenue can signal share buybacks rather than operating improvement.