Valuation
Forward P/E
Forward P/E prices the stock against earnings analysts expect, not earnings already reported.
Trailing P/E looks backward. Forward P/E looks at the earnings the street expects over the coming year. If a company is recovering, the forward figure is often the one that matches how investors are actually arguing about the stock. If estimates are too hopeful, the forward P/E looks artificially cheap.
Stocklytics builds a forward P/E from the next fiscal year's EPS estimate when that estimate is available, and falls back to the provider's forward ratio when it is not. Treat the number as a consensus, not a promise. Pair it with the trailing P/E: a large gap means expectations and history disagree, which is exactly where more reading pays off.
Formula
Forward P/E = Share price ÷ expected earnings per share over the next four quarters
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Neither trailing nor forward P/E is on this quote, which usually means earnings are absent or negative.
Related
P/E Ratio · PEG Ratio · Analyst Forecast
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Questions
Which P/E should I use?
Use both. Trailing P/E is grounded in filings. Forward P/E tells you what price already assumes about the next year.
How often do estimates change?
Analysts revise after earnings, guidance, and big news. A forward P/E from last quarter can be stale the morning after a report.