Forward PE VS Trailing PE English

Forward PE Vs Trailing PE

The main difference between Forward PE and Trailing PE is that Forward PE looks at future earnings to calculate a company’s value, while Trailing PE relies on earnings from the last 12 months of the company.

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Forward PE Meaning

Forward Price to Earnings (Forward PE) ratio estimates a company’s expected earnings in the future to evaluate its stock price. It shows how much investors are willing to pay today for each rupee of future earnings.

Forward PE helps investors predict how a company is expected to perform, offering insight into whether a stock is undervalued or overvalued based on future earnings prospects. By comparing the current share price with estimated future earnings per share (EPS), investors get a sense of the company’s growth potential and whether the stock might offer a good return on investment. This forward-looking approach is particularly useful in assessing companies in fast-growing industries where past