[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"app-context":3,"blog-what-drives-eps-growth-key-stock-return-driver-EN":150},{"languages":4,"categories":41,"products":125,"competitors":149},[5,9,13,17,21,25,29,33,37],{"name":6,"code":7,"id":8},"English","EN","TGFuZ3VhZ2U6ZW4=",{"name":10,"code":11,"id":12},"Español","ES","TGFuZ3VhZ2U6ZXM=",{"name":14,"code":15,"id":16},"Português","PT","TGFuZ3VhZ2U6cHQ=",{"name":18,"code":19,"id":20},"日本語","JA","TGFuZ3VhZ2U6amE=",{"name":22,"code":23,"id":24},"한국어","KO","TGFuZ3VhZ2U6a28=",{"name":26,"code":27,"id":28},"Deutsch","DE","TGFuZ3VhZ2U6ZGU=",{"name":30,"code":31,"id":32},"Italiano","IT","TGFuZ3VhZ2U6aXQ=",{"name":34,"code":35,"id":36},"Français","FR","TGFuZ3VhZ2U6ZnI=",{"name":38,"code":39,"id":40},"中文 (中国)","ZH","TGFuZ3VhZ2U6emg=",[42,73,104],{"icon":43,"slug":44,"title":45,"description":46,"featuredLinks":47},"mingcute:stock-line","stock-market-basics","Stock Market Basics","\u003Cp>Beginners' guides and practical tips for understanding stock market investing.\u003C\u002Fp>\n",[48,53,58,63,68],{"url":49,"title":50,"description":51,"ogImage":52},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-makes-stocks-go-up-and-down","What Makes Stocks Go Up and Down | TIKR.com","Understanding what makes stock prices go up and down can help investors better navigate investing. Click to learn more!","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-makes-stocks-go-up-and-down-banner\u002FWhat-makes-stocks-go-up-and-down-banner.jpg?_i=AA",{"url":54,"title":55,"description":56,"ogImage":57},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fdividend-yield-meaning-formula-example","Dividend Yield: Meaning, Formula, Example | Tikr.com Blog | TIKR.com","The dividend yield is a key metric for investors looking to gauge the income potential of their investments. It measures how much a company pays out in","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FDividend-yield\u002FDividend-yield.png?_i=AA",{"url":59,"title":60,"description":61,"ogImage":62},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fmarket-capitalization-definition-formula-and-why-it-matters","Market Capitalization: Definition, Formula, and Why It Matters | TIKR.com","Long-term investors often look at various valuation metrics when deciding whether to invest in a particular company. One helpful metric to evaluate is","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FMarket-Capitalization-Definition-Formula-and-Why-It-Matters\u002FMarket-Capitalization-Definition-Formula-and-Why-It-Matters.png?_i=AA",{"url":64,"title":65,"description":66,"ogImage":67},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fearnings-per-share-definition-formula-and-why-eps-matters","Earnings Per Share: Definition, Formula, and Why EPS Matters | TIKR.com","Earnings Per Share (EPS) represents the portion of a company's net earnings allocated to each share. Click to learn more!","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FEPS-Defiinition-formula-and-why-EPS-matters-1\u002FEPS-Defiinition-formula-and-why-EPS-matters-1.png?_i=AA",{"url":69,"title":70,"description":71,"ogImage":72},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-a-stock-price-target","What Is a Stock Price Target? | TIKR.com","A price target is a stock's estimated future price. It can help investors quickly find undervalued stocks. Learn more now!","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-is-a-Stock-Price-Target-2\u002FWhat-is-a-Stock-Price-Target-2.png?_i=AA",{"icon":74,"slug":75,"title":76,"description":77,"featuredLinks":78},"material-symbols:analytics-outline","fundamental-analysis","Fundamental Analysis","\u003Cp>In-depth resources and financial metrics to help you evaluate companies like a pro.\u003C\u002Fp>\n",[79,84,89,94,99],{"url":80,"title":81,"description":82,"ogImage":83},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fshare-repurchase-why-do-companies-buy-back-their-stock","Share Repurchase: Why Do Companies Buy Back Their Stock? | TIKR.com","Share repurchases, or share buybacks, have gained popularity in the last two decades. According to a report from Goldman Sachs, stock buybacks initiated","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FTIKR-BLOG-COVER-PHOTOS-3_544a7f4e\u002FTIKR-BLOG-COVER-PHOTOS-3_544a7f4e.png?_i=AA",{"url":85,"title":86,"description":87,"ogImage":88},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-a-good-return-on-invested-capital","What Is a Good Return on Invested Capital? | TIKR.com","Learning about Return on Invested Capital (ROIC) can help investors spot highly profitable stocks that can drive long-term returns. Learn more now!","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-is-a-good-return-on-Invested-capital\u002FWhat-is-a-good-return-on-Invested-capital.png?_i=AA",{"url":90,"title":91,"description":92,"ogImage":93},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-a-good-return-on-equity-ratio","What is a Good Return on Equity Ratio | Tikr.com Blog | TIKR.com","Return on Equity (ROE) is a financial ratio that reflects a company's profitability in relation to the equity invested by shareholders. It basically","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-is-a-good-return-on-equity-ratio-1\u002FWhat-is-a-good-return-on-equity-ratio-1.jpg?_i=AA",{"url":95,"title":96,"description":97,"ogImage":98},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-a-good-p-e-ratio","What Is a Good P\u002FE Ratio? | TIKR.com","Financial analysts and investors look at various metrics before deciding whether a stock is a buy. One of the metrics is the price-to-earnings ratio (P\u002FE","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-is-a-good-PE-ratio-1\u002FWhat-is-a-good-PE-ratio-1.jpg?_i=AA",{"url":100,"title":101,"description":102,"ogImage":103},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Ftop-6-metrics-for-investing-in-reits","Top 6 Metrics for Investing in REITs | TIKR.com","Real estate has been one of the greatest asset classes for wealth creation in history, and investing in Real Estate Investment Trusts (REITs) can allow","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FGroup-10\u002FGroup-10.png?_i=AA",{"icon":105,"slug":106,"title":107,"description":108,"featuredLinks":109},"hugeicons:investigation","investing-lingo","Investing Lingo","\u003Cp>A comprehensive glossary of investing terms and jargon so you can speak the language of the markets confidently.\u003C\u002Fp>\n",[110,115,120],{"url":111,"title":112,"description":113,"ogImage":114},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fenterprise-value-definition-and-calculation","Enterprise Value: Definition and Calculation | Tikr.com Blog | TIKR.com","Enterprise value (EV) is a financial metric that offers a comprehensive snapshot of a company's total value. Unlike market capitalization which solely","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FEnterprise-Value-Definition-and-Calculation_37576e40\u002FEnterprise-Value-Definition-and-Calculation_37576e40.png?_i=AA",{"url":116,"title":117,"description":118,"ogImage":119},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Febitda-definition-formula-how-to-use-it","EBITDA: Definition, Formula, How to Use It | TIKR.com","EBITDA stands for earnings before interest, taxes, depreciation and amortization. It's a financial metric commonly used to evaluate a company's financial","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FEBITDA-Definition-Formula-How-to-Use-It\u002FEBITDA-Definition-Formula-How-to-Use-It.png?_i=AA",{"url":121,"title":122,"description":123,"ogImage":124},"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-the-free-cash-flow-formula-and-why-does-it-matter","What is the Free Cash Flow Formula and Why Does It Matter | TIKR.com","Free cash flow, or FCF, is the cash a company generates after it accounts for outflows required to maintain business operations and support capital","https:\u002F\u002Fwww.tikr.com\u002Fimages\u002FWhat-is-the-free-cash-flow-formula\u002FWhat-is-the-free-cash-flow-formula.png?_i=AA",[126,130,134,137,141,145],{"slug":127,"modified":128,"title":129},"valuation-model-builder","2025-07-03T00:18:53","Value Stocks Quickly and Accurately",{"slug":131,"modified":132,"title":133},"stock-portfolio-tracking","2024-12-02T22:21:28","Monitor Your Portfolio",{"slug":75,"modified":135,"title":136},"2025-01-21T22:10:52","Instantly Analyze Companies with In-Depth Metrics",{"slug":138,"modified":139,"title":140},"stock-screener","2024-12-02T22:13:31","Find the Best Stocks to Buy",{"slug":142,"modified":143,"title":144},"investor-stock-portfolio","2025-01-21T22:02:56","Follow Investment Moves of Top Investors",{"slug":146,"modified":147,"title":148},"analyze-stocks","2025-07-23T16:04:24","Analyze Stocks",[],{"post":151,"seo":182,"relatedPosts":189,"suggestedPosts":190},{"id":152,"title":153,"date":154,"modified":155,"excerpt":156,"content":157,"wordCount":158,"lang":159,"uri":160,"slug":161,"cloudinaryAssetId":162,"featuredImageOriginalUrl":163,"featuredImageMetadata":164,"author":166,"editor":171,"categories":174,"relatedPosts":178,"seo":179},1180,"What Drives EPS Growth? | Key Stock Return Driver","2024-11-08T01:02:10","2025-04-09T16:47:28","\u003Cp>What is EPS? Earnings Per Share (EPS) represents a company’s net earnings divided by its total number of shares outstanding. EPS is a great gauge of a company’s profitability for each share. Over the long term, EPS growth drives a stock’s price appreciation and makes a stock’s price rise over time. The Three Pillars of …\u003C\u002Fp>\n","\n\u003Ch2 class=\"wp-block-heading\" id=\"h-what-is-eps\">What is EPS?\u003C\u002Fh2>\n\n\n\n\u003Cp>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fearnings-per-share-definition-formula-and-why-eps-matters\">Earnings Per Share\u003C\u002Fa> (EPS) represents a company’s net earnings divided by its total number of shares outstanding.\u003C\u002Fp>\n\n\n\n\u003Cp>EPS is a great gauge of a company’s profitability for each share. Over the long term, EPS growth drives a stock’s \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-makes-stocks-go-up-and-down\">price appreciation\u003C\u002Fa> and makes a stock’s price rise over time.\u003C\u002Fp>\n\n\n\n\u003Ch2 class=\"wp-block-heading\" id=\"h-the-three-pillars-of-eps-growth\">The Three Pillars of EPS Growth\u003C\u002Fh2>\n\n\n\n\u003Cp>EPS growth is important for stock market investors because it’s one of the primary drivers of shareholder returns over the long run.\u003C\u002Fp>\n\n\n\n\u003Cp>The three factors that drive EPS growth are \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Frevenue-growth-why-its-important-and-key-drivers\">revenue growth\u003C\u002Fa>, \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fhow-to-analyze-a-companys-profit-margins-gross-operating-and-net\">margin expansion\u003C\u002Fa>, and \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fshare-repurchase-why-do-companies-buy-back-their-stock\">share buybacks\u003C\u002Fa>.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Cstrong>\u003Cem>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002F?ref=tikrblog\">Analyze stocks quicker with TIKR >>>\u003C\u002Fa>\u003C\u002Fem>\u003C\u002Fstrong>\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\" id=\"h-revenue-growth-the-foundation\">Revenue Growth: The Foundation\u003C\u002Fh3>\n\n\n\n\u003Cp>Revenue growth is the bedrock of EPS growth. For a company to increase its earnings sustainably, it must grow sales. Revenue growth can be achieved through strategies like:\u003C\u002Fp>\n\n\n\n\u003Cul class=\"wp-block-list\">\n\u003Cli>\u003Cstrong>Price Increases\u003C\u002Fstrong>: Raising the price per unit sold increases revenue if customers are willing to pay more without reducing demand significantly.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Market Share Growth\u003C\u002Fstrong>: A company can grow revenue without expanding into new territories by increasing its share within an existing market. Winning over competitors’ customers or capturing previously untapped demand allows the company to increase its top-line revenue within its core market.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>New Market Entry\u003C\u002Fstrong>: Entering new geographical regions or demographic segments opens up entirely new customer bases, allowing the company to grow revenue beyond its current boundaries. This strategy diversifies the revenue base and spreads market risk.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Customer Retention\u003C\u002Fstrong>: Customer retention is especially important for software companies. Retaining customers for a longer period reduces churn and maximizes the lifetime value of each customer. This steady revenue stream from loyal customers strengthens growth and provides a reliable base for further expansion efforts.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Expansion (Upsell, Cross-Sell, etc.)\u003C\u002Fstrong>: Increasing revenue from existing customers by offering complementary products, premium versions, or add-ons allows the company to increase each customer’s spend. This approach taps into the current customer base, enhancing revenue without acquiring new customers.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>New Products\u003C\u002Fstrong>: Launching new products or services creates fresh revenue streams and attracts new customers, while encouraging existing customers to spend more. This approach diversifies offerings and enhances the company’s value proposition.\u003C\u002Fli>\n\u003C\u002Ful>\n\n\n\n\u003Cp>\u003Cstrong>Example:\u003C\u002Fstrong>\u003Cbr>Apple Inc. (AAPL) has seen its revenue growth drive EPS growth over the past 10 years:\u003C\u002Fp>\n\n\n\n\u003Cfigure class=\"wp-block-image size-full\">\u003Cimg width=\"1000\" height=\"600\" data-public-id=\"images\u002Fapple-inc-aapl-12_156488aaf5\u002Fapple-inc-aapl-12_156488aaf5.webp\" loading=\"lazy\" decoding=\"async\" src=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1000,h_600,c_scale\u002Ff_webp,q_auto\u002Fv1745362049\u002Fimages\u002Fapple-inc-aapl-12_156488aaf5\u002Fapple-inc-aapl-12_156488aaf5.webp?_i=AA\" alt=\"Apple's 10-Year Annual Revenue and EPS Growth\" class=\"wp-post-1180 wp-image-1185 wp-image-15648\" data-format=\"webp\" data-transformations=\"f_webp,q_auto\" data-version=\"1745362049\" data-seo=\"1\" srcset=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Ff_webp,q_auto\u002Fv1745362049\u002Fimages\u002Fapple-inc-aapl-12_156488aaf5\u002Fapple-inc-aapl-12_156488aaf5.webp?_i=AA 1000w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_300,h_180,c_scale\u002Ff_webp,q_auto\u002Fv1745362049\u002Fimages\u002Fapple-inc-aapl-12_156488aaf5\u002Fapple-inc-aapl-12_156488aaf5.webp?_i=AA 300w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_768,h_461,c_scale\u002Ff_webp,q_auto\u002Fv1745362049\u002Fimages\u002Fapple-inc-aapl-12_156488aaf5\u002Fapple-inc-aapl-12_156488aaf5.webp?_i=AA 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \u002F>\u003Cfigcaption class=\"wp-element-caption\">\u003Cstrong>Figure 1\u003C\u002Fstrong>: Apple’s 10-Year Annual Revenue and EPS Growth\u003C\u002Ffigcaption>\u003C\u002Ffigure>\n\n\n\n\u003Cp>Long-term investors who recognized Apple’s ability to consistently grow revenue benefited from Apple’s strong share price appreciation.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fstock-screener?ref=organics\">\u003Cstrong>\u003Cem>Find the best high-flying growth stocks to buy now with TIKR >>>\u003C\u002Fem>\u003C\u002Fstrong>\u003C\u002Fa>\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\" id=\"h-margin-expansion-boosting-profitability\">Margin Expansion: Boosting Profitability\u003C\u002Fh3>\n\n\n\n\u003Cp>Margin expansion occurs when a company increases its profitability per dollar of revenue.\u003C\u002Fp>\n\n\n\n\u003Cp>This can happen in several ways:\u003C\u002Fp>\n\n\n\n\u003Cul class=\"wp-block-list\">\n\u003Cli>\u003Cstrong>Cost Management:\u003C\u002Fstrong> Reducing expenses through improved operational efficiency.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fhow-to-analyze-a-companys-competitive-advantage\">Economies of Scale\u003C\u002Fa>:\u003C\u002Fstrong> Spreading fixed costs over a larger revenue base.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Premium Pricing:\u003C\u002Fstrong> Offering high-value products that justify higher prices.\u003C\u002Fli>\n\u003C\u002Ful>\n\n\n\n\u003Cp>Margin expansion plays a key role in boosting a company’s earnings, but there’s a natural limit to how profitable a business can become.\u003C\u002Fp>\n\n\n\n\u003Cp>That said, when businesses can increase profit margins, it can greatly impact a company’s \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-a-good-net-margin-definition-formula\">bottom line\u003C\u002Fa> and reward shareholders.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Cstrong>Example:\u003C\u002Fstrong>\u003C\u002Fp>\n\n\n\n\u003Cp>Microsoft (MSFT) expanded its margins by transitioning its business model to a subscription-based approach for products like Office 365 and Azure. The chart below shows how Microsoft improved its operating margin at double-digit rates for years, which had a sizeable impact on Microsoft’s earnings per share over time.\u003C\u002Fp>\n\n\n\n\u003Cfigure class=\"wp-block-image size-full\">\u003Cimg width=\"1000\" height=\"600\" data-public-id=\"images\u002Fmicrosoft-corporation-ms_1563905eaa\u002Fmicrosoft-corporation-ms_1563905eaa.webp\" loading=\"lazy\" decoding=\"async\" src=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1000,h_600,c_scale\u002Ff_webp,q_auto\u002Fv1745362047\u002Fimages\u002Fmicrosoft-corporation-ms_1563905eaa\u002Fmicrosoft-corporation-ms_1563905eaa.webp?_i=AA\" alt=\"Microsoft's 10-Year Annual Change in Operating Margins and EPS\" class=\"wp-post-1180 wp-image-1186 wp-image-15639\" data-format=\"webp\" data-transformations=\"f_webp,q_auto\" data-version=\"1745362047\" data-seo=\"1\" srcset=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Ff_webp,q_auto\u002Fv1745362047\u002Fimages\u002Fmicrosoft-corporation-ms_1563905eaa\u002Fmicrosoft-corporation-ms_1563905eaa.webp?_i=AA 1000w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_300,h_180,c_scale\u002Ff_webp,q_auto\u002Fv1745362047\u002Fimages\u002Fmicrosoft-corporation-ms_1563905eaa\u002Fmicrosoft-corporation-ms_1563905eaa.webp?_i=AA 300w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_768,h_461,c_scale\u002Ff_webp,q_auto\u002Fv1745362047\u002Fimages\u002Fmicrosoft-corporation-ms_1563905eaa\u002Fmicrosoft-corporation-ms_1563905eaa.webp?_i=AA 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \u002F>\u003Cfigcaption class=\"wp-element-caption\">\u003Cstrong>Figure 2:\u003C\u002Fstrong> Microsoft’s 10-Year Annual Change in Operating Margins and EPS\u003C\u002Ffigcaption>\u003C\u002Ffigure>\n\n\n\n\u003Cp>By improving its margins, Microsoft amplified its profitability, driving EPS growth for its shareholders.\u003C\u002Fp>\n\n\n\n\u003Cp>Investors must be cautious of companies that cut costs excessively. If cost-cutting undermines product quality or innovation, it can harm long-term revenue growth.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Cstrong>\u003Cem>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002F?ref=tikrblog\">Invest like Wall Street with the TIKR Terminal >>>\u003C\u002Fa>\u003C\u002Fem>\u003C\u002Fstrong>\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\" id=\"h-share-buybacks-amplifying-eps\">Share Buybacks: Amplifying EPS\u003C\u002Fh3>\n\n\n\n\u003Cp>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fshare-repurchase-why-do-companies-buy-back-their-stock?ref=tikrblog\">Share buybacks\u003C\u002Fa> directly impact EPS by reducing the total number of outstanding shares. When a company repurchases its shares, the same earnings are spread across fewer shares, increasing EPS even if net income remains constant.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Cbr>\u003Cstrong>Example:\u003C\u002Fstrong>\u003C\u002Fp>\n\n\n\n\u003Cp>In 2022, Meta Platforms (META) launched a major share buyback program, repurchasing over $31 billion worth of stock while its stock price was low.\u003C\u002Fp>\n\n\n\n\u003Cp>Although Meta faced challenges with revenue growth at the time, the buybacks provided a significant boost to EPS. By 2023, as revenue growth rebounded, it became clear that the buyback program delivered long-term value beyond just a short-term earnings lift.\u003C\u002Fp>\n\n\n\n\u003Cfigure class=\"wp-block-image size-full\">\u003Cimg width=\"1425\" height=\"571\" data-public-id=\"images\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp\" loading=\"lazy\" decoding=\"async\" src=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1425,h_571,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA\" alt=\"\" class=\"wp-post-1180 wp-image-11644 wp-image-11652\" data-format=\"webp\" data-transformations=\"f_webp,q_auto\" data-version=\"1745362042\" data-seo=\"1\" srcset=\"https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 1425w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_300,h_120,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 300w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1024,h_410,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 1024w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_768,h_308,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 768w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1200,h_481,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 1200w, https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Fw_1400,h_561,c_scale\u002Ff_webp,q_auto\u002Fv1745362042\u002Fimages\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0\u002F504-73-Meta-Platforms-Inc-META-TIKR-Terminal-04-07-2025_02_27_AM_11652ba7d0.webp?_i=AA 1400w\" sizes=\"auto, (max-width: 1425px) 100vw, 1425px\" \u002F>\u003Cfigcaption class=\"wp-element-caption\">\u003Cstrong>Figure 3:\u003C\u002Fstrong> Meta’s 4-Year Revenue, Share Buybacks, and Stock Price\u003C\u002Ffigcaption>\u003C\u002Ffigure>\n\n\n\n\u003Cp>While buybacks can effectively enhance EPS, it’s important that buybacks are funded by the company’s internal \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fwhat-is-the-free-cash-flow-formula-and-why-does-it-matter\">free cash flow\u003C\u002Fa>, not debt. Also, the company shouldn’t be buying back shares if the stock is significantly overvalued.\u003C\u002Fp>\n\n\n\n\u003Ch2 class=\"wp-block-heading\" id=\"h-external-and-internal-factors-influencing-eps-growth\">External and Internal Factors Influencing EPS Growth\u003C\u002Fh2>\n\n\n\n\u003Cp>Beyond the three pillars, long-term investors should consider external and internal factors that influence EPS growth:\u003C\u002Fp>\n\n\n\n\u003Cul class=\"wp-block-list\">\n\u003Cli>\u003Cstrong>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fhow-macro-factors-impact-the-stock-market?ref=tikrblog\">Economic Environment\u003C\u002Fa>:\u003C\u002Fstrong> Inflation, interest rates, and GDP growth can impact revenue and margins.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Industry Trends:\u003C\u002Fstrong> Regulatory changes, technological advancements, and competitive dynamics affect growth potential.\u003C\u002Fli>\n\n\n\n\u003Cli>\u003Cstrong>Corporate Strategy:\u003C\u002Fstrong> \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fblog\u002Fhow-to-evaluate-a-companys-management-in-investing\">Leadership decisions\u003C\u002Fa> on capital allocation, R&D investments, and mergers\u002Facquisitions shape EPS trajectories.\u003C\u002Fli>\n\u003C\u002Ful>\n\n\n\n\u003Ch2 class=\"wp-block-heading\" id=\"h-faq-section\">\u003Cstrong>FAQ Section\u003C\u002Fstrong>\u003C\u002Fh2>\n\n\n\n\u003Ch3 class=\"wp-block-heading\" id=\"h-what-is-eps-growth\">What is EPS growth?\u003C\u002Fh3>\n\n\n\n\u003Cp>EPS growth refers to the increase in a company’s earnings per share over time. It reflects how effectively a company is growing its net income relative to its share count.\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\">Why is EPS growth important for investors?\u003C\u002Fh3>\n\n\n\n\u003Cp>EPS growth is important for investors because it often leads to stock price appreciation. Companies that consistently grow EPS tend to attract more investor interest and can justify higher valuations.\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\">What are the main drivers of EPS growth?\u003C\u002Fh3>\n\n\n\n\u003Cp>The main drivers of EPS growth include revenue growth, margin expansion, cost control, share buybacks, and improved operational efficiency. These factors contribute to higher net income or a reduced share count, both of which increase EPS.\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\">How do share buybacks impact EPS growth?\u003C\u002Fh3>\n\n\n\n\u003Cp>Share buybacks impact EPS growth by reducing the number of outstanding shares. This can increase EPS even if net income remains flat, making buybacks a common financial strategy to boost reported earnings per share.\u003C\u002Fp>\n\n\n\n\u003Ch3 class=\"wp-block-heading\">Can EPS grow even if revenue is flat?\u003C\u002Fh3>\n\n\n\n\u003Cp>Yes, EPS can grow even if revenue is flat, especially if a company improves profit margins, reduces costs, or repurchases shares. These actions can enhance net income or decrease the denominator in the EPS calculation.\u003C\u002Fp>\n\n\n\n\u003Ch2 class=\"wp-block-heading\" id=\"h-tikr-takeaway\">\u003Cstrong>TIKR Takeaway\u003C\u002Fstrong>\u003C\u002Fh2>\n\n\n\n\u003Cp>Revenue growth, margin expansions, and share buybacks are the primary drivers behind EPS growth.\u003C\u002Fp>\n\n\n\n\u003Cp>The TIKR Terminal offers industry-leading financial data on over 100,000 stocks, so if you’re looking to \u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002Fstock-screener?ref=tikrblog\" target=\"_blank\" rel=\"noreferrer noopener\">find the best stocks to buy\u003C\u002Fa> for your portfolio, you’ll want to use TIKR!\u003C\u002Fp>\n\n\n\n\u003Cp>TIKR offers institutional-quality research for investors who think of buying stocks as buying a piece of a business.\u003C\u002Fp>\n\n\n\n\u003Cp>\u003Ca href=\"https:\u002F\u002Fwww.tikr.com\u002F?ref=tikrblog\">\u003Cstrong>\u003Cem>Sign up for free now! >>>\u003C\u002Fem>\u003C\u002Fstrong>\u003C\u002Fa>\u003C\u002Fp>\n\n\n\n\u003Ch2 class=\"wp-block-heading\" id=\"h-disclaimer\">\u003Cstrong>Disclaimer:\u003C\u002Fstrong>\u003C\u002Fh2>\n\n\n\n\u003Cp>\u003Cem>Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks.  We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!\u003C\u002Fem>\u003C\u002Fp>\n",1183,"en","\u002Fblog\u002Fwhat-drives-eps-growth-key-stock-return-driver","what-drives-eps-growth-key-stock-return-driver","images\u002FGroup-4\u002FGroup-4","https:\u002F\u002Fres.cloudinary.com\u002Ftikr\u002Fimages\u002Ff_webp,q_auto\u002Fv1731027720\u002Fimages\u002FGroup-4\u002FGroup-4.?_i=AA",{"altText":153,"imageCredit":165},"",{"name":167,"slug":168,"role":169,"roleTitle":165,"biography":165,"avatar":165,"socialMediaLinks":170},"Thomas Richmond","thomastikr","author",[],{"name":167,"slug":168,"role":172,"roleTitle":165,"biography":165,"avatar":165,"socialMediaLinks":173},"editor",[],[175],{"name":76,"slug":75,"uri":176,"description":165,"postsCount":177},"\u002Fblog\u002Fcategory\u002Ffundamental-analysis",0,[],{"title":180,"metaDesc":181,"opengraphDescription":181,"twitterTitle":180,"twitterDescription":181},"What Drives EPS Growth? | Key Stock Return Driver | Tikr.com Blog","What is EPS? Earnings Per Share (EPS) represents a company’s net earnings divided by its total number of shares outstanding. EPS is a great gauge of a company’s profitability for each share. Over the long term, EPS growth drives a stock’s price appreciation and makes a stock’s price rise over time. The Three Pillars of …",{"title":180,"description":183,"twitterTitle":180,"twitterDescription":183,"author":167,"articlePublisher":184,"articlePublishedTime":154,"articleModifiedTime":155,"twitterLabel1":185,"twitterData1":186,"ogTitle":180,"ogDescription":183,"ogUrl":160,"ogImage":163,"ogImageWidth":187,"ogImageHeight":188,"ogImageSecureUrl":163,"ogImageAlt":153,"twitterImage":163},"What is EPS? Earnings Per Share (EPS) represents a company’s net earnings divided by its total number of shares outstanding. EPS is a great gauge of a company’s profitability for each share. Over the long term, EPS growth drives a stock’s price appreciation and makes a stock’s price rise over time. The Three Pillars of …","TIKR.com","Est. reading time","7 minutes",1200,630,[],[]]