Courses / Earnings Power / Adjusted EPS

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Adjusted EPS (3:23)

Adjusted EPS adjusts EPS for non-recurring items. For many companies, Adjusted EPS is the most important metric that drives stock price.

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Eddie Wu
10 months ago

It is usually the case that stock price will increase when the company beat the expectations, but I also have seen price goes when when quarter earning beats the expectation significantly. For example, Netflix beat the the earning by 15 or 20% last quarter, but it’s price dropped heavily right after. Does this mean the exceed earnings is not high enough for investor to pay at price for that moment? Maybe investors were looking for a 30/40% higher expectation?

Eddie Wu
10 months ago
Reply to  Lumovest

A very well-explained answer! Thank you so much!

Humberto Giordano
11 months ago

Hi Guys! Awesome job with the course. i’m really enjoying it.
Just wanted to check that when you guys were calculating the adjusted EPS in the example, you said $1.120/100 = 1.12$ but it actually is $11.2.

Luke Harto
11 months ago

When i have been looking at stocks financials i have noticed that sometimes the reported EPS and normalised are different including when i calculate it. Why is this the case?
Also would you count interest as non recurring payment?

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