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Revenue Per Share
Revenue Per Share

a valuable financial metric that helps investors understand a company's revenue generation efficiency relative to its share count.

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Written by Support
Updated over a year ago

On platforms like Dividend Data, you can find Revenue Per Share for stocks. This helps you make informed investment decisions.


Definition:

Revenue Per Share is a ratio that measures the amount of revenue generated by a company for each outstanding share of stock. It is a key indicator of a company's effectiveness in generating sales and can be used to compare performance across companies and industries.

Calculating Revenue Per Share

Revenue Per Share is calculated using the following formula:

Revenue Per Share = (Total Revenue / Weighted Average Shares Outstanding)

Where:

  • Total Revenue is the total revenue earned by the company during a specific period.

  • Weighted Average Shares Outstanding is the number of shares outstanding during the period, adjusted for any stock splits or other capital changes.

Importance of Revenue Per Share in Financial Analysis

  1. Company Size and Scalability: Provides an understanding of the company's size in terms of revenue generation capacity per share.

  2. Growth Comparison: Useful for comparing a company's growth with its competitors and industry averages.

  3. Investment Decision-Making: A higher RPS can indicate a potentially more efficient and profitable company, making it an attractive investment.

Revenue Per Share vs. Earnings Per Share

  • While Earnings Per Share (EPS) focuses on profitability, Revenue Per Share concentrates on the top-line revenue generation efficiency.

Analyzing Revenue Per Share

  1. Trend Analysis: Observing changes in RPS over time can provide insights into a company’s growth and operational efficiency.

  2. Sector Benchmarking: Comparing RPS across companies within the same industry can help identify market leaders and laggards.

  3. Market Positioning: High RPS can signify a strong market position and robust sales operations.

Factors Influencing Revenue Per Share

  1. Revenue Growth: Increases in total revenue positively impact RPS.

  2. Share Count Changes: Stock buybacks or issuance can affect the denominator of the RPS calculation.

  3. Market and Economic Conditions: Overall economic health and industry-specific trends can influence a company’s revenue and, consequently, its RPS.

Related Articles
Annual Dividend Per Share
Price-To-Sales Ratio
Net Income Per Share
Free Cash Flow Per Share
Price-To-FCF Ratio
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