why is earnings per share eps important in fundamental analysis 
eps indicates a company s profitability on a per share basis helping investors determine how much profit a company generates for each share of its stock it is a critical metric for assessing company performance and valuing stocks the bottom linefundamental analysis is used to value a company and determine whether a stock is over or undervalued by the market it considers the economic market sector specific and financial performance financial ratios generated from financial reports and government industry and economic reports are used to assess a company not every analyst uses the same tools or views stocks similarly you might determine a stock is valued differently than another analyst what s important is that the stock you analyze meets your criteria for value and that your analysis creates actionable information 