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.
Also referred to as "estimated price to earnings". Investopedia Says:
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:
Earnings
Earnings Estimate
Price Multiple
Price-Earnings Ratio - P/E Ratio
Trailing Price-To-Earnings - Trailing P/E |