Q: In a recent answer concerning NTR you mentioned it is trading at 9.6x Forward P/E. Where do you find a company’s forward P/E? Do you calculate it using the numbers pertaining to the company found under the Market Data tab? If so what numbers do you use? Thanks … Cal
5i Research Answer:
A company’s Forward Earnings could be broadly found through financial research software such as Koyfin, Refinity Eikon and Bloomberg or free site like nasdaq.com. The ratio is calculated by dividing the current share price by the estimated earnings one year from now.
We usually use Forward P/E to evaluate investment ideas. As we think, Forward P/E does provide a clear picture of a company’s valuation taking into account its growth prospect. As past earnings are track records to evaluate, what matters to prospective investors is its future earnings.