EPS is often the first number companies report to shareholders in their quarterly earnings calls. It is simply the company’s net income for the quarter or year divided by the average number shares outstanding during the period.
Shareholders expect increases in EPS over time, just as they do with revenue. Other things being equal, a growing EPS presages an increasing stock price. During an economic slowdown, revenues might fall, but most companies try hard to keep EPS up by reducing costs. Shareholders can accept revenue declines during a slump, but they don’t like to see a drop in EPS.
On Thursday,Shares of JetBlue Airways Corporation(NASDAQ:JBLU) added 1.97% and closed at $22.81 in the last trading session.JBLU belongs to Services sector and Regional Airlines industry. The last trading range of the stock ranges between $22.36 and $22.92.
The company’s Market capitalization is $7.71B with the total Outstanding Shares of $7.71B. During the 52-week trading session the minimum price at which share price traded, registered at $14.76 and reached to max level of $23.15.The EPS of company is strolling at 1.89.
Analyst’s mean target price for JBLU is $25.62 while analysts mean suggestion is 2.50.
On the otherhandSanchez Energy Corp(NYSE:SN) decreased -7.79% and closed at $6.63 in the last trading session.SN belongs to Basic Materials sector and Independent Oil & Gas industry. The last trading range of the stock ranges between $6.60 and $7.43.
The company’s Market capitalization is $554.95M with the total Outstanding Shares of $82.31M. During the 52-week trading session the minimum price at which share price traded, registered at $5.64 and reached to max level of $14.39. The EPS of company is strolling at -3.65.
Analyst’s mean target price for SN is $13.00 while analysts mean suggestion is 2.20.
Growth in earnings per share is everything. The expected future growth in earnings per share (“EPS”) is an incredibly important factor in identifying an under-valued stock. The impact of earnings growth is exponential. Over the long run, the price of a stock will generally go up in lock step with its earnings (assuming the P/E ratio is constant). Therefore stocks with higher earnings growth should offer the highest capital gains. And doubling the growth more than doubles the capital gain, due to the compounding effect.
All things being equal, stocks with higher earnings-per-share growth rates are generally more desirable than those with slower earnings-per-share growth rates. One of the important differences between earnings-per-share growth rates and net-income growth rates is that the former reflects the dilution that occurs from new stock issuance, the exercise of employee stock options, warrants, convertible securities, and share repurchases.