Forward P/E
What is it? A stock?s price-earnings ratio for the current fiscal year. The P/E ratio is most often calculated by dividing the stock?s market price by its earnings per share for the most recent 12-month period. The resulting trailing P/E ratio gives investors an idea of a stock?s value. The forward P/E, which uses earnings estimates for the current year, gives investors an even better idea of whether a stock is a good buy. If earnings estimates go up, the forward P/E will be lower than the trailing P/E. That could be a signal that it?s a good time to invest in the stock.Added By: Henry
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