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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Leonardo DRS's Sloan Ratio for the quarter that ended in Jun. 2026 was -0.64%.
As of Jun. 2026, Leonardo DRS has a Sloan Ratio of -0.64%, indicating the company is in the safe zone and there is no funny business with accruals.
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Jun. 2026, Leonardo DRS has a Sloan Ratio of -0.64%, indicating the company is in the safe zone and there is no funny business with accruals.
Leonardo DRS Sloan Ratio % Related Terms
Leonardo DRS Sloan Ratio % Historical Data
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The historical data trend for Leonardo DRS's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aerospace & Defense subindustry, Leonardo DRS's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Leonardo DRS Sloan Ratio % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Leonardo DRS's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Leonardo DRS's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Leonardo DRS's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Leonardo DRS's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 72 (Sep. 2025 ) + 102 (Dec. 2025 ) + 62 (Mar. 2026 ) + 86 (Jun. 2026 ) = $322 Mil.
Leonardo DRS's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 107 (Sep. 2025 ) + 425 (Dec. 2025 ) + -66 (Mar. 2026 ) + 35 (Jun. 2026 ) = $501 Mil.
Leonardo DRS's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was -45 (Sep. 2025 ) + -49 (Dec. 2025 ) + -29 (Mar. 2026 ) + -29 (Jun. 2026 ) = $-152 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Leonardo DRS (DRS) has a Sloan Ratio % of -0.64% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Leonardo DRS and its competitors.
Is Leonardo DRS's Sloan Ratio % too high?
Leonardo DRS's current Sloan Ratio % is -0.64%. Overall, Leonardo DRS has a GF Score™ of 78/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Leonardo DRS's Sloan Ratio % compare to MOG.A and HII?
Leonardo DRS's Sloan Ratio % of -0.64% can be compared against companies in the Aerospace & Defense industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for an Aerospace & Defense company?
A good Sloan Ratio % depends on the Aerospace & Defense industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Leonardo DRS and its competitors. Leonardo DRS's current Sloan Ratio % is -0.64%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Leonardo DRS stock overvalued right now?
Based on GuruFocus' analysis, Leonardo DRS (DRS) is currently considered Modestly Overvalued. The stock's GF Value™ is $37.86, compared to a current price of $44.82 — trading 18.4% above its estimated fair value. The current Sloan Ratio % is -0.64%. Leonardo DRS's overall GF Score™ is 78/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Leonardo DRS (DRS), the current Sloan Ratio % is -0.64% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Leonardo DRS (DRS) Overvalued in 2026?
Based on GuruFocus' analysis, Leonardo DRS stock appears to be overvalued.
The current stock price of $44.82 is trading 18.4% above its estimated GF Value™ of $37.86.
GuruFocus considers Leonardo DRS to be Modestly Overvalued.
Key valuation signals for DRS:
Sloan Ratio %: -0.64%
GF Value™: $37.86 vs. price of $44.82 (18.4% above fair value)
No single metric tells the full story. See the DRS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Leonardo DRS Inc is a provider of defense products and technologies that are used across land, air, sea, space, and cyber domains. It is in the design, development, and manufacture of Advanced sensing, network computing, force protection, and electric power and propulsion technologies and solutions. The company has two segments: Advanced Sensing and Computing, which generates the majority of revenue, and the Integrated Mission Systems segment. The Advanced Sensing and Computing segment is engaged in designing, developing, and manufacturing sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision-making and execution by the customers.
78GF Score
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Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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