CAPE Ratio
The CAPE ratio compares an equity index level with ten-year average inflation-adjusted earnings.
Earnings forecasts, growth, yield, and CAPE offer distinct valuation views that depend on consistent earnings definitions and time horizons.
Earnings forecasts, growth rates, and yields answer different questions about equity valuation. An Earnings Estimate sets out expected profit or EPS for a defined period. Consensus is an aggregation, not a guarantee: contributor dates, accounting adjustments, and the choice of mean or median can change the headline number.
Earnings Growth measures changes in comparable profit or EPS. Distinguish annual growth from cumulative growth and check whether changing share counts explain the per-share result. The PEG Ratio compares P/E with a stated annual growth rate, but a low ratio can reflect a rebound from depressed earnings rather than stronger long-term prospects.
Earnings Yield divides EPS by share price; it is not a cash payout or promised return. The CAPE Ratio instead compares price with ten-year average inflation-adjusted earnings to provide a longer-cycle perspective. These educational measures require consistent data and do not provide automatic buy or sell signals or personalized investment advice.
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The CAPE ratio compares an equity index level with ten-year average inflation-adjusted earnings.
An earnings estimate forecasts profit or EPS; examples show how margins, consensus methods, and revisions affect earnings surprises and forward P/E.
Earnings growth tracks comparable profit or EPS over time, with worked examples of dilution, annual growth, and multi-year compounding.
Earnings yield divides earnings per share by share price, expressing equity valuation as the inverse of a consistently calculated P/E ratio.