Forward vs. Trailing P/E Divergence

Methodology

Data. The universe is the S&P 500. For each company, Alpha Vantage's OVERVIEW endpoint returns TrailingPE (price over the last twelve months' EPS) and ForwardPE (price over the next twelve months' consensus EPS). Both use today's share price, so their ratio gives the market's implied year-ahead EPS growth: TrailingPE ÷ ForwardPE - 1 = EPSforward ÷ EPStrailing - 1. A positive number means the forward P/E is lower than the trailing P/E, so the market is pricing in earnings growth. A negative number means the reverse.

Companies with a trailing or forward P/E outside (0, 300] are excluded from every chart and average. A company with near-zero earnings produces a huge (or negative) P/E that says nothing about valuation.

History. OVERVIEW only reports the current P/E pair, so each weekly run adds that week's market-wide median to a running series. Earnings Revisions works the same way. The series is short at first and gets more informative with each run.

Implied vs. actual growth. This compares the implied forward growth rate with each company's trailing QuarterlyEarningsGrowthYOY (from the same OVERVIEW call), using the Pearson and Spearman regression from Factor Analysis. A weak or negative relationship would mean analysts mostly expect mean reversion (a strong recent quarter doesn't repeat) instead of momentum.

This page runs its own weekly Alpha Vantage pull instead of using Sector Beeswarm's OVERVIEW data, because that job doesn't store the P/E fields this page needs. Insider Buying/Selling and a few other pages do the same.