Investing term
What is Trailing P/E?
P/E using the most recent four reported quarters of earnings in the denominator.
Trailing P/E values a stock using its actual earnings from the most recent four quarters, in contrast to forward P/E's reliance on forecasts. It's grounded in real, reported results rather than analyst hopes — more reliable, but backward-looking, so for a rapidly changing company it can misrepresent where things are heading. Many investors look at both.
For example
A stock at $100 with $4 of trailing twelve-month earnings has a trailing P/E of 25 — based on profits already in the books, not projected.
Trailing P/E is taught hands-on in Stage 15 — Valuation for Investors.
See the lesson →