Fundamental Glossary / Valuation Ratios
Trailing P/E Ratio (TTM)
Price divided by earnings over the last twelve months, often called TTM for trailing twelve months.
Formula
Current price per share / earnings per share for the last four reported quarters.
What it means
Trailing P/E uses profit the company has already reported. It does not depend on a forecast, so two readers using the same filings should get the same earnings figure.
TTM smooths a single quarter. For a seasonal business, four quarters are a fairer base than the latest quarter alone.
How to read it
Use it as the factual multiple, then ask whether the next year will look like the last one. A low trailing P/E after a peak profit year is often the expensive point of the cycle, not the cheap one.
What to watch
The last twelve months can still contain an exceptional item. Strip that out before treating the multiple as normal. Also match the share count to the same period as the earnings.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.