What is TTM in Stock Market?

When you are analyzing a company’s performance or looking at a stock's valuation, you’ll frequently see the acronym TTM. In the fast-moving world of the stock market, relying on year-old annual reports can lead to poor investment decisions.

TTM is the solution to that lag. Here is a deep dive into what it means and how it helps you value companies and IPOs in 2025.

What is TTM?

TTM stands for Trailing Twelve Months. It is a financial measurement that looks at a company’s performance over the most recent 12 consecutive months.

Unlike a "Financial Year" (which is fixed, e.g., April to March), TTM is a rolling period. Every time a company releases its new quarterly results, the TTM period "rolls" forward—it adds the newest quarter and drops the oldest one from a year ago.

How to Calculate TTM

There are two common ways to calculate it:

1. Sum of Last 4 Quarters: Simply add the results of the four most recent quarters.

$$TTM\ Revenue = Q_{current} + Q_{current-1} + Q_{current-2} + Q_{current-3}$$

2. The Formula Method:

$$TTM = \text{Latest Fiscal Year} + \text{Current YTD} - \text{Previous Year's YTD}$$

TTM in Stock Valuation & IPOs

When a company comes out with an IPO (Initial Public Offering), investors use TTM to see the "Current Reality" of the business rather than historical data.

1. The TTM P/E Ratio

The Price-to-Earnings (P/E) ratio is the most common valuation tool.

• Standard P/E: Uses earnings from the last financial year (could be 9 months old).
• TTM P/E: Uses earnings from the last 12 months. This tells you how much you are paying for the company's actual recent profits.

2. Spotting Growth or Decay

For an IPO-bound company, TTM revenue helps you see if the company's momentum is slowing down or accelerating just before they go public. If the TTM Revenue is significantly higher than the last audited annual revenue, the company is in a high-growth phase.

3. Smoothing Seasonality

Some businesses (like Retail or Tourism) have "bumper" quarters. TTM ensures you see a full cycle of 12 months, preventing a single great quarter from making the company look better than it actually is.

Comparison: TTM vs. Financial Year (FY)

Feature	TTM (Trailing Twelve Months)	Financial Year (FY)
Data Recency	High (Updates every quarter)	Low (Updates once a year)
Time Period	Rolling 12-month window	Fixed (e.g., April—March)
Best For	Valuation (P/E, EPS)	Long-term historical trends
Usage	Real-time decision making	Tax and Audit compliance

Frequently Asked Questions (FAQ)

1. Is TTM the same as "Forward P/E"?

No. TTM looks backward at the last 12 months of actual data. Forward P/E looks at the next 12 months of estimated or projected earnings.

2. Where can I find TTM data?

Most financial websites (like Moneycontrol, Ticker, or Yahoo Finance) automatically calculate TTM figures for you under the "Ratios" or "Financials" section of a stock.

3. Why is TTM important for loss-making startups?

For startups (common in current IPO cycles), TTM revenue growth is more important than profit. It shows whether the "burn rate" is decreasing and if sales are scaling month-over-month.