Forward Price To Earnings - Forward P/E

AAA

DEFINITION of 'Forward Price To Earnings - Forward P/E'

A measure of the price-to-earnings ratio (P/E) using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated P/E analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.

Forward Price To Earnings (Forward P/E)



Also referred to as "estimated price to earnings".

INVESTOPEDIA EXPLAINS 'Forward Price To Earnings - Forward P/E'

The estimated P/E of a company is often used to compare current earnings to estimated future earnings. If earnings are expected to grow in the future, the estimated P/E will be lower than the current P/E. This measure is also used to compare one company to another with a forward-looking focus.

RELATED TERMS
  1. P/E 10 Ratio

    A valuation measure, generally applied to broad equity indices, ...
  2. P/E 30 Ratio

    The price-to-earnings (P/E) ratio is the valuation ratio of a ...
  3. Franchise Factor

    The measurement of the impact on a company's price-earnings (P/E) ...
  4. Earnings

    The amount of profit that a company produces during a specific ...
  5. Earnings Estimate

    An analyst's estimate for a company's future quarterly or annual ...
  6. Price-Earnings Ratio - P/E Ratio

    A valuation ratio of a company's current share price compared ...
Related Articles
  1. The 5 Types Of Earnings Per Share
    Markets

    The 5 Types Of Earnings Per Share

  2. Can Investors Trust The P/E Ratio?
    Fundamental Analysis

    Can Investors Trust The P/E Ratio?

  3. Earnings Guidance: Can It Accurately ...
    Economics

    Earnings Guidance: Can It Accurately ...

  4. How To Find P/E And PEG Ratios
    Investing Basics

    How To Find P/E And PEG Ratios

comments powered by Disqus
Hot Definitions
  1. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  6. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
Trading Center