What it is:
Forward earnings are the profits a company (or companies) expect to generate during a future period of time.
How it works (Example):
Why it Matters:
Forward earnings are used to calculate the forward price-to-earnings ratio (P/E), an oft-cited metric in stock valuation. Some companies closely manage projections of their forward earnings, sometimes by working closely with analysts that cover their stock. Always keep in mind that forward earnings are estimates, and they should not be used exclusively when valuing stocks.