Forward price-to-earnings ratio

The P/E ratio using next year's expected earnings instead of last year's.

Forward P/E = share price ÷ expected earnings per share for the next fiscal year

Forward P/E swaps reported earnings for the consensus estimate of next year's. When it is well below the trailing P/E, analysts expect earnings to grow; when it is above, they expect a decline.

Where it misleads. Estimates are forecasts, and they tend to be optimistic and to move after the fact. Treat the forward P/E as a statement of what the market expects, then check whether the company's history supports it, for example with a reverse DCF.

Questions

What is Forward P/E?

The P/E ratio using next year's expected earnings instead of last year's.

How is Forward P/E calculated?

Forward P/E = share price ÷ expected earnings per share for the next fiscal year.

Related terms

P/E ratioHow many dollars investors pay for each dollar of a company's yearly profit.Price to free cash flowMarket value divided by the cash the business generated after investing in itself.Free cash flow yieldThe cash a business produced last year as a percentage of what the stock market values it at.Earnings yieldThe inverse of the P/E ratio: yearly profit as a percentage of the share price.EV/EBITDAThe whole business's value, debt included, divided by its operating earnings before non-cash charges.Price to salesMarket value divided by yearly revenue.Price to bookMarket value divided by the accounting value of what shareholders own.

Live figures from the latest prices and SEC filings. Information only, not investment advice. Updated October 9, 2026.