EPS growth measures the percentage change in trailing twelve-month earnings per share. It captures both the effect of profit growth and the effect of share count changes (buybacks or dilution). A company can grow EPS even with flat net income by reducing its share count through buybacks, and conversely, a company with growing profits can see EPS stagnate if the share count is increasing through stock compensation.
EPS Growth [1Y] = (EPS TTM current / EPS TTM 1 year ago) − 1 EPS Growth [3Y] = (EPS TTM current / EPS TTM 3 years ago) − 1 EPS Growth [5Y] = (EPS TTM current / EPS TTM 5 years ago) − 1
GeminIQ uses TTM EPS (Net Income / Basic Shares) compared to the same metric [1/3/5] years prior. Growth is not calculated when the prior period's EPS was zero or negative.
A: EPS is affected by three levers: revenue growth, margin expansion, and share count reduction. Share buybacks reduce the denominator, increasing EPS even when net income is unchanged. Margin expansion increases the numerator. Many mature companies deliver EPS growth primarily through buybacks and efficiency rather than revenue growth.
A: Both matter, and the answer depends on the company's stage. For growth companies, revenue growth is the primary signal because margins and earnings can follow later. For mature companies, EPS growth is more relevant because it reflects the return actually accruing to each share.
A: EPS depends on both net income and shares outstanding. Different share count definitions (basic vs. diluted, period-end vs. weighted average) change the base EPS and therefore the growth rate. GeminIQ uses basic shares for consistency with market cap.