Phew .. excellent points! Your points will force me to reflect more on companies that are new to me. I often go to a base. For example, Berkshire prefers to report Non-GAAP for good reasons. As I get to know individual companies, I understand the respective reporting better over time.
How about ETF total return? I noticed that some websites and screeners aren't displaying identical figures! Are they using different formulas? In addition, what websites or screeners provide the 6-months total return figure (many don't!)?
Matt, great discussion on the FWD PE. You affirm some of my thoughts around it. I have a question for you, use the example of AMD: My understanding is that FWD PE is the expected the PE for next 12 months. However, if you look at AMD's quarterly PE and FWD PE in Yahoo Finance->AMD->statistics, you will see that the FWD PE are in the range of 24-50, but the PEs are in the range of 100-350. In another word, the projected PE was never realized, not even close. So, my question is what is the point of having a FWD PE, if there are never materiailzed later?
I also checked it on TIKR terminal, it has the yearly figures. In the past 5 years, the FWD PE are in the 20-46 range, but TTM PE are in the 46-140 range. Same thing, projected PE never materialized.
FWD PE isn’t always next 12 months (I talk about this in the AMD example because they are using different numbers on different sites). The purpose of the FWD P/E is to tell you what the company will be trading at if the price stays the same but they hit their projected earnings estimates. It gives you a glimpse into what multiple they’re trading at based on future earnings
This is by company though, each company is different and have a different history. But also price of the stock will change the PE too, not just earnings
@@mattderron I see, so FWD PE is future earning/current price? That's why they never materialize because next period come around, the price has gone up?
Phew .. excellent points!
Your points will force me to reflect more on companies that are new to me.
I often go to a base.
For example, Berkshire prefers to report Non-GAAP for good reasons.
As I get to know individual companies, I understand the respective reporting better over time.
How about ETF total return? I noticed that some websites and screeners aren't displaying identical figures! Are they using different formulas?
In addition, what websites or screeners provide the 6-months total return figure (many don't!)?
Ohh shoot this should be good. I have actually wondered this for a while
likewise
Matt, great discussion on the FWD PE. You affirm some of my thoughts around it. I have a question for you, use the example of AMD:
My understanding is that FWD PE is the expected the PE for next 12 months. However, if you look at AMD's quarterly PE and FWD PE in Yahoo Finance->AMD->statistics, you will see that the FWD PE are in the range of 24-50, but the PEs are in the range of 100-350. In another word, the projected PE was never realized, not even close. So, my question is what is the point of having a FWD PE, if there are never materiailzed later?
I also checked it on TIKR terminal, it has the yearly figures. In the past 5 years, the FWD PE are in the 20-46 range, but TTM PE are in the 46-140 range. Same thing, projected PE never materialized.
FWD PE isn’t always next 12 months (I talk about this in the AMD example because they are using different numbers on different sites). The purpose of the FWD P/E is to tell you what the company will be trading at if the price stays the same but they hit their projected earnings estimates. It gives you a glimpse into what multiple they’re trading at based on future earnings
This is by company though, each company is different and have a different history. But also price of the stock will change the PE too, not just earnings
@@mattderron I see, so FWD PE is future earning/current price? That's why they never materialize because next period come around, the price has gone up?
@ or down, but yes
Solid video i was thinking about the forward p/e metric recently and this explains it really well
Thanks!
Great video! Always wondered this!
Thanks!
Finally someone getting it right. Thx for the good video, great job.
thanks!
Thanks for what you do, peace man.
No worries!
This is EXACLY I needed to see
Nice!