THE EFFECT OF RETURN ON EQUITY ON STOCK PRICES WITH EARNINGS PER SHARE AS AN INTERVENING VARIABLE IN TECHNOLOGY COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE 2020–2024 PERIOD

Open Access
Article Info
Submitted: 2026-07-09
Published: 2026-07-15
Section: Articles
Language: EN
In Vol 1, No 1 (2026): 1st ICoBLAST

The rapid growth of capital market is currently attracting the attention of the public and investors to invest in the stock market. During the period 2020-2024, the average stock prices of the technology companies listed on the Indonesian Stock Exchange (IDX) experienced fluctuating conditions and tended to decline. One of the financial ratios suspected to influence stock price movements is the profitability ratio, namely ROE and EPS because they are able to explain a company’s ability to generate profits. This study aims to examine the effect of ROE on stock prices through EPS as a mediating variable. The type of this research is explanatory research with purposive sampling as the sampling technique, resulting in 15 out of 47 technology companies listed on the IDX being selected as the research sample. The analytical method used is simple linear regression analysis with the assistance of SPSS 26. The results of this research show that ROE has no significant effect on stock prices. However, ROE has a positive and significant effect on EPS. EPS has a positive and significant effect on stock prices. Then EPS serves as a full mediating variable and significantly mediates the effect of ROE on stock prices.

 

Keywords: earning per share; return on equity; and stock price

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  1. Saratri Sarsintorini  Faculty of Social and Political Sciences, Diponegoro University, Indonesia, Indonesia