What Is Price Per Share (PPS)?

By Kristi Waterworth – Updated Jun 17, 2025 at 12:21 AM EST

Key Points

Price per share reflects cost to buy one stock share; market cap indicates total value.
Stock splits reduce price per share to attract investors; reverse splits increase it.
Factors like buying trends, financial health, and economic reports influence stock prices.

If you’re an investor, you’ve certainly come across the concept of price per share. Everything you buy has a cost, but understanding what influences the cost of a stock can help make you a better investor.

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A price tag with three dollar symbols on it. — Image source: The Motley Fool

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Stock splits and reverse splits

Companies can directly affect the price of their stocks through stock splits. These are events where the company declares a different number of shares will exist from a certain point forward. Usually it’s expressed as an integer-for-integer split, like a 5-for-1 split or a 1-for-3 split.

In standard stock splits, your single share will be converted to multiple shares, lowering the entry point for new investors. So, if you own XYZ, Inc. and it decides to offer a 5-for-1 split, your stock holdings will remain the same, though you’ll have more shares, and the price per share of each stock, including the newly minted ones, will go from $30 to $6.

However, if ABC, Inc. is struggling to attract investors, it might do a reverse stock split, where it combines stocks to artificially push up price per share. If it did a 1-for-2 split, each stock share would go from $30 to $60, making it look very impressive, indeed. Be very careful with companies that are doing reverse splits and understand why they’re doing them before buying.

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Federal Reserve

The Federal Reserve, often referred to as “the Fed,” is the central bank of the United States.

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For example, the Job Openings and Labor Turnover Survey (JOLTS) report is often in the news. This indicator of the health of the job market can influence the Federal Reserve’s willingness to raise interest rates, which can make investors very nervous -- nervous enough to pull out of stocks that they love and are otherwise sound, and move their money to more sure things, like bonds, which inevitably will drop the price of those stocks.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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