EPS is a critical metric for investors as it directly impacts stock valuation and investment decisions. Higher EPS values typically indicate stronger profitability, making a company more attractive to investors. It is often used in conjunction with the price-to-earnings (P/E) ratio to evaluate whether a stock is overvalued or undervalued. EPS trends over time help analysts determine the financial health and growth potential of a company. Additionally, many dividend-paying companies use EPS to set dividend payout policies, ensuring sustainable distributions.