What is forward P/E and how reliable are analyst estimates?

Updated November 15, 2026 · examples use today’s data

Forward P/E divides today's share price by the earnings per share analysts expect over the next twelve months or the next fiscal year.

A real example

Nvidia's trailing P/E is about 20.6, while its forward P/E is about 12.4. The gap tells you how much earnings growth the analysts expect, after three years of revenue growth of about 100% a year.

How reliable are estimates?

For stable businesses, next year's consensus is usually close. For cyclical and fast-changing companies, estimates can be badly wrong in both directions, and they tend to move after the stock price rather than before it.

Use both

The trailing P/E is fact, the forward P/E is opinion. A stock that only looks cheap on forward numbers is a bet that the forecasts come true.

Frequently asked questions

Where do the estimates come from?

They are the average of the forecasts published by the analysts who cover the company, updated every day.

What is a price target?

An analyst’s estimate of where the stock will trade in twelve months. We show the average, the lowest and the highest target.

Tools for this

Stock analysis What is the P/E ratio?

Keep learning

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Educational content, not investment advice. Figures in the examples come from company filings and market prices and update automatically.