How to Start Analyzing Stocks for Smarter Investments

If you are new to the world of investing, understanding how to analyze a stock can feel overwhelming. However, by breaking it down into a few simple steps, you can start to get a better sense of whether a company is worth your money. Let's look at a few key factors—EPS, social sentiment, and analyst ratings—and how you can easily access this data.

What Is EPS and Why Is It Important?

EPS, or Earnings Per Share, is a way to measure how much profit a company makes for each share of its stock. It's calculated by taking a company's net income and dividing it by the number of shares outstanding. This number can tell you how profitable the company is, and if it's becoming more profitable over time.

Investors often compare a company's actual EPS (the profit it really made) to the estimated EPS (what analysts thought it would make). If the actual EPS is higher than expected, that can be a good sign that the company is doing well. If it's lower, it might mean the company is struggling or growing slower than people hoped.

To find EPS data, developers and traders can use Financial Modeling Prep's Earnings Historical & Upcoming API endpoint. For

example:

https://financialmodelingprep.com/api/v3/historical/earning_calendar/AAPL?apikey=YOUR_API_KEY

Replace `YOUR_API_KEY` with your own key after registering on the Financial Modeling Prep website. Using this data, you can easily check how a company's EPS has changed over time and compare it to analyst expectations. Also change the stock ticker to your desired ticker. AAPL (Apple company stocks) is taken as an example.

Social Sentiment: What People Are Saying About a Stock

Social sentiment looks at what people are saying about a stock on social media, forums, or other online platforms. If most comments are positive, it might mean more people are excited about the company, which could help boost its stock price. If the sentiment is negative, investors might be worried, which can push the price down.

To get social sentiment data, you can use Financial Modeling Prep's Historical Social Sentiment API endpoint:

https://financialmodelingprep.com/api/v4/historical/social-sentiment?symbol=AAPL&page=0&apikey=YOUR_API_KEY

By using this data, you can quickly see if the market mood around a stock is upbeat or gloomy. Traders can combine this insight with EPS trends to understand if a company's positive numbers are also earning a good response from the public.

Analyst Ratings: Professional Opinions on a Stock

Many professional analysts study company reports, visit their facilities, and compare them to their competitors before giving a rating. These ratings often come in forms like “Buy,” “Hold,” or “Sell.” Checking analyst recommendations can help you spot strong stocks that have solid backing from industry experts.

To see these ratings, you can use the Analyst Recommendation API endpoint from Financial Modeling Prep:

https://financialmodelingprep.com/api/v3/analyst-stock-recommendations/AAPL?apikey=YOUR_API_KEY

This gives you insight into what the experts think about the stock you're interested in.

Once you have a sense of the EPS, social sentiment, and analyst ratings for a stock, you can combine all of this into a single decision. The Stocks 2 Buy app makes this simpler. On the app's main screen, you can enter the ticker symbol of the stock you want to research. The app will then provide a mid-term trade recommendation (Buy, Sell, or Hold) based on a combination of EPS analysis, social sentiment analysis, and analyst ratings.

This saves you time and reduces the guesswork. Instead of manually combing through data, you simply open the app, type in the stock ticker, and view the recommended action. By looking at all three factors together—financial performance (EPS), public mood (social sentiment), and professional advice (analyst ratings)—you can feel more confident about your investment moves.

Starting stock analysis doesn't have to be complicated. By understanding the basics of EPS, paying attention to social sentiment, and following analyst ratings, you can get a clearer picture of a stock's strengths and weaknesses. Tools like the Financial Modeling Prep APIs give you easy access to the data you need. Over time, as you gain more experience, you can refine your process and become a more confident investor.