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Plotting a PE vs Time chart of stock

Questions › Category: Valuation Quadrant › Plotting a PE vs Time chart of stock
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Jerry Ling asked 4 years ago

Hi Rusmin/Victor,
I wanted to plot a PE vs Time to measure the average PE value of a stock. Shall I use a historical PE or Trailing 4Q PE?
My concern is price always fluctuates with earnings of company. If company get good earnings in a quarter, stock price might surge 10%. 
To keep the data accurate, I am thinking of using trailing 4Q PE. 
So would like to seek for your opinion and advise on which is a better and more accurate approach. Thanks. 
 

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Lee Mei Ooi replied 4 years ago

Hi Victor,

So if i want to measure the historical PE of a company, i need to use the trailing 4Q PE right. How far back do i calculate from? 5 years? Thanks

Victor Chng Staff replied 4 years ago

Hi Mei Ooi,

If possible 10 years

1 Answers
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Victor Chng Staff answered 4 years ago

Hi Jerry,
 
Yes you are right the trailing 4Q PE is more of an accurate figure. 

Thomas replied 4 years ago

May I ask where do we get a historical company’s trailing PE?

Victor Chng Staff replied 4 years ago

Hi Thomas,

Trailing PE is the latest 4 quarter earnings. You have to calculate yourself when the latest quarter being release