Forward P/E
The share price divided by expected earnings per share for the next twelve months, based on analyst estimates.
Forward P/E divides the current share price by estimated EPS for a future period, usually the next twelve months or the next fiscal year. The estimates come from analyst consensus, so the ratio depends on forecast quality. It is lower than trailing P/E when earnings are expected to grow.
On our site, forward P/E is labeled with the estimate period and the consensus source. A large gap between forward and trailing P/E points to a change in expected earnings.
Traders care because the market prices expected earnings more than past ones. Forward P/E shows how much growth the current price already assumes.
Worked example (illustrative numbers, not real data): a stock trades at 60 dollars with trailing EPS of 3.00, a P/E of 20. Consensus next-year EPS is 4.00, so the forward P/E is 15. The gap shows the price already reflects expected growth of about one-third.