Diluted EPS measures the profit attributable to each share of common stock, accounting for all potentially dilutive securities. It divides trailing twelve-month net income by the diluted share count, which includes the effect of stock options, convertible bonds, warrants, and restricted stock units that could become common shares. Diluted EPS is the more conservative of the two EPS measures and is the figure most commonly referenced by analysts and in financial media.
Diluted EPS = Net Income (TTM) / Weighted Average Diluted Shares Outstanding
GeminIQ divides TTM Net Income by the diluted share count from the most recent filing. Both inputs come directly from the company's SEC filing via their XBRL tags.
A: Basic EPS uses only shares currently outstanding. Diluted EPS accounts for all securities that could become common shares (options, warrants, convertibles), producing a lower EPS figure. Diluted EPS is more conservative because it shows what earnings per share would look like if all dilutive securities were exercised.
A: Diluted EPS specifically uses diluted shares because it is measuring the per-share earnings impact of all potentially dilutive securities. Other per-share metrics like cash flow per share and free cash flow per share use basic shares for consistency with how market cap is calculated (price × basic shares), ensuring all per-share ratios are on the same denominator basis.
A: Differences typically arise from the share count — whether the platform uses period-end shares or weighted average shares, and how it handles anti-dilutive securities (which should be excluded from the diluted count when a company is loss-making). GeminIQ uses the company's own reported weighted average diluted shares from the filing.
A: Basic EPS equals net income minus preferred dividends, divided by the weighted average number of common shares outstanding. Diluted EPS uses the same numerator but divides by the diluted share count, which adds shares that could be issued from options, restricted stock units, and convertible securities, so it is equal to or lower than basic EPS.
A: EPS shows how much profit a company earned for each share of its common stock. On its own it says little, because share counts differ across companies; it becomes useful when tracked over time for the same company, or when divided into the share price to produce the P/E ratio.
Further Reading: How Stocks React After Earnings: A 17-Year Analysis
Now put it to work. Screen every US public company by Diluted EPS.
Start 7-Day Free Trial →