GAAP vs adjusted (non-GAAP) EPS — which do you model?

How to answer

GAAP follows accounting standards; adjusted strips items management deems non-recurring (often stock-based comp, restructuring, amortization of acquired intangibles, one-time charges). ER usually models/quotes adjusted EPS because consensus and guidance are framed on it — but scrutinize the add-backs: recurring stock-based comp added back every quarter is a real economic cost. Always know the bridge between the two.

Key idea: Comparing a GAAP estimate to an adjusted consensus, or accepting recurring stock-based comp as a legitimate one-time add-back.