Live data
AAPL — EPS (TTM), Share Price. Open AAPL on the Ledge to see current values.
Formula
Basic EPS = Net Income / Weighted Avg Shares Outstanding
Compare
| Metric | What It Includes | When to Use |
|---|---|---|
| Basic EPS | Only current outstanding shares | Simple view, may overstate per-share earnings |
| Diluted EPS | Adds potential shares (options, convertibles) | More conservative, preferred by analysts |
Key point
Always use diluted EPS for valuation. A company with $1B net income and 500M basic shares looks great at $2 EPS. But if 200M options are in-the-money, diluted EPS is $1.43. That changes the P/E significantly.
Key insight
Check-in
Company X has 100M basic shares outstanding. It also has 10M stock options (strike $50) and 5M convertible bonds (convertible at $40). Stock at $60. Diluted EPS denominator?
Check your understanding
Sit with the ideas.
A company has net income of $800M, 200M weighted average shares, and 20M stock options outstanding with an exercise price of $40. The average stock price is $60. Using the treasury stock method, what is diluted EPS (approximately)?
Why: