How can you Value any Company with EPS?



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Is there any Set Parameters or Indexes with the help of which,you can Value any Company on the Basis of its EPS?

1 Answer(s)


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EPS is the net income available to common shareholders of the company divided by the number of shares outstanding. The most important thing to look for in the EPS figure is the overall quality of earnings. Make sure the company is not trying to manipulate their EPS numbers to make it look like they are more profitable. Also, look at the growth in EPS over the past several quarters / years to understand how volatile their EPS is, and to see if they are an underachiever or an overachiever. In other words, have they consistently beaten expectations or are they constantly restating and lowering their forecasts.