If a stock’s forward P/E is 3 times lower than its trailing P/E, what does this indicate?
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It indicates future earnings are expectedd to be 3x trailing earnings.
I’m no math whiz, but…
p=15
e0=1, p/e=15
e1=3, p/e=5
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it means that earnings are growing. 90% of companies will have a lower forward P/E. basic math homie. finance 101. what it most likely means is that there were some one-time writeoffs or restructuring charges taken in the current year.
man forget the forward P/E all bogus haha
It still contains useful information, like how much average growth is required to justify the price.
cyclical stock yo
ahh yes. thanks