TTM (Trailing Twelve Months)
The most recent four completed quarters added into a one-year figure — the basis for reading lumpy quarterly results, smoothed and up to date.
In plain terms
TTM is "the most recent four completed quarters combined into a one-year figure." If we are just past Q3, you sum last year's Q4 + this year's Q1, Q2, Q3 for the latest one-year performance.
Why view it this way? Company results are lumpy quarter to quarter (selling more at year-end, etc.). Looking at one quarter leaves you swayed by that season. Bundling four quarters brings in all four seasons, smoothing the lumpiness so you see the most up-to-date one-year strength.
What it tells you
A company usually reports annual results once a year. But waiting for that leaves you with numbers up to a year stale. TTM, reflecting through the latest quarter, is a "living one-year figure," fresher than the annual number.
Using TTM when computing metrics like PER, ROE, and net margin gives a stable value less swayed by one quarter's outlier. (Most metrics in this dictionary and on our screen are on a TTM basis.)
Formula
TTM = sum of the most recent 4 quarters (e.g. revenue TTM = the last 4 quarters' revenue added together)
What high or low means
Even the same metric differs in value whether on a "single quarter" or "TTM" basis. TTM bundles a year for more stability, but recent changes show up slowly, over four quarters.
So a sharp change (sudden improvement or worsening) shows up a beat late in TTM. To see the latest flow look at the quarterly trend; to see the stable level look at TTM.
TTM is simply the sum of quarterly results, so if the company acquired or sold a business within that year, the numbers may not connect smoothly. When an acquired company's revenue is combined from partway through, "organic growth" and "growth from combining" get mixed.
TTM is a "trailing (past)" value looking at the prior four quarters. The market moves on the future, so it can differ from a "forward" value that uses estimates ahead (e.g. trailing PER vs forward PER).
When a large one-off gain or loss lands in one quarter, it stays in TTM for four quarters. When that quarter drops off a year later, TTM can suddenly swing.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see TTM and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.