Glossary / Fundamentals
EPS growth
Also called: earnings per share growth · earnings growth
Earnings per share is net income divided by the number of shares outstanding, and EPS growth is the change in that figure between two reported periods. It combines how profit changed with how the share count changed.
How it is measured
How is EPS growth measured?
Compare earnings per share in one reported period to the same figure in an earlier one — usually the same quarter a year before, which removes seasonality. The diluted version counts shares that would exist if outstanding options and convertibles were exercised, and is the more conservative of the two.
Why it matters
Why does EPS growth matter to a swing trader?
EPS growth is a per-owner measurement rather than a company-wide one, which is the reason to prefer it over raw profit growth: buybacks shrink the denominator and lift the figure without any change in the business, while share issuance does the reverse. The other caution is sample size — a single quarter's growth is heavily exposed to one-off items, so the direction across several periods is the more stable reading.
In Tapeline
Does Tapeline use EPS growth?
Earnings-per-share growth between reported periods is one of the five inputs to Tapeline's Fundamentals factor.
Tapeline publishes the six factor names and the ordering of their weights. The numeric weights, the scoring equation and the band edges are not published.
Related
See this in the product
What the Fundamentals factor measures · The Fundamentals factor · Full methodology
Related terms
Back to the full glossary.
General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.