Forward PE

Forward PE = Current market price/ estimated EPS for the next financial year
Forward PE is the current market price divided by the estimated EPS, usually for the next financial year.

PE = market price/ EPS
The Price Earnings ratio is the market price of the stock divided by its Earnings Per Share (EPS = net profit/ number of shares).

In the case of EPS, it is not so much a high or low EPS that matters as the growth in the EPS. The company's PE reflects investors' expectations of future growth in the EPS.

A high PE company is one where investors have hopes that earnings will rise, which is why they buy the share.

Because stock prices are based on expectations of future earnings, analysts usually estimate the future earnings per share of a company. This is known as the forward PE.