The Price-to-Earnings (P/E) Ratio is the most widely used valuation metric in equity markets. It tells you how much investors are currently paying for every dollar of earnings a company generates. A P/E of 20x means investors are paying $20 for every $1 of annual earnings.
The Trailing Twelve Months (TTM) P/E uses actual reported earnings from the past 12 months — it is backward-looking and factual. The Forward P/E uses analyst consensus earnings estimates for the next 12 months — it is more speculative but more forward-looking. On StressTest.pro, we display TTM P/E computed as a trailing average to smooth out quarterly noise.
What constitutes a 'high' or 'low' P/E is entirely context-dependent. The S&P 500 has historically traded between 15x–25x P/E. Growth sectors like Technology typically command 30x–50x+ because investors pay a premium for expected future earnings growth. Value sectors like Utilities and Financials often trade well below 15x.
ETFs like VFV.TO or VOO.US may show N/A or 0 for P/E because the data pipeline computes this from individual company financial statements — a pass-through ETF that holds hundreds of stocks does not itself report EPS in the traditional sense. The underlying holdings do, but the fund wrapper does not.