Trailing vs. Forward P/E: Two Ratios, One Stock

Summary

Hollow Point Trading shares a short explainer on how two P/E ratios can describe the same stock when they use different earnings inputs. Using a $60 share price, $3 in trailing earnings per share gives a trailing P/E of 20, while a forecast of $4 produces a different forward P/E—helpful context for comparing valuations.

https://youtu.be/lcO51UixWas

Two price earnings ratios can describe the same stock #Shorts

Trailing vs. Forward P/E: Two Ratios, One Stock
Two price earnings ratios can describe the same stock if the earnings inputs differ. Imagine a share price of sixty dollars and earnings per share of three dollars over the last twelve months. The trailing ratio is twenty. Now suppose an analyst forecasts four dollars of earnings per share for the next year. Dividing the same sixty dollar price ...

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