I know that one of the downfalls of P/E Ratio is that it can’t be used when earnings are negative and I clearly understand that. Does that apply to both trailing and forward PE? When it states P/E are we to automatically assume its trailing?
I guess it applies to both. If you would estimate that due to whatever, a company will make a loss next year, but will start to make profits afterwards, the ‘forward’ P/E would be negative, but you could still think the stock is a good investment in the long run. Or what dou you think?
Not sure because I saw a questions about why PE can’t be used and in the answer was the trailing PE and forward PE would be negative. Anyone else have an idea?
forward PE is usually based on projections from trailing data. Negative data makes projections negative. That’s probably the reason