Forward P/E

Forward P/E divides share price by analysts' estimated earnings per share for the next twelve months, rather than trailing actuals. It answers a different question than the standard P/E: not 'how expensive is this stock today' but 'how expensive is it relative to where earnings are headed.'

• —A forward P/E well below the trailing P/E signals the market expects earnings growth — and the reverse signals an expected decline.
• —It depends entirely on analyst estimates, which can be too optimistic, too conservative, or simply wrong.
• —Most useful read alongside trailing P/E and PEG, not as a standalone number.