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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.
Red Violet's Sloan Ratio for the quarter that ended in Jun. 2026 was -3.95%.
As of Jun. 2026, Red Violet has a Sloan Ratio of -3.95%, 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, Red Violet has a Sloan Ratio of -3.95%, indicating the company is in the safe zone and there is no funny business with accruals.
Red Violet Sloan Ratio % Related Terms
Red Violet Sloan Ratio % Historical Data
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The historical data trend for Red Violet'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.
FRA:2KH vs DFIN, GTM, UPBD: Sloan Ratio % Comparison
For the Software - Application subindustry, Red Violet'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.
Red Violet Sloan Ratio % vs Software Industry
For the Software industry and Technology sector, Red Violet's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Red Violet'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.
Red Violet's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Red Violet's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 3.589 (Sep. 2025 ) + 2.404 (Dec. 2025 ) + 3.796 (Mar. 2026 ) + 4.305 (Jun. 2026 ) = €14.09 Mil.
Red Violet's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 8.667 (Sep. 2025 ) + 5.712 (Dec. 2025 ) + 5.696 (Mar. 2026 ) + 9.233 (Jun. 2026 ) = €29.31 Mil.
Red Violet's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was -2.455 (Sep. 2025 ) + -2.594 (Dec. 2025 ) + -3.033 (Mar. 2026 ) + -3.008 (Jun. 2026 ) = €-11.09 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.
Red Violet (FRA:2KH) has a Sloan Ratio % of -3.95% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Red Violet and its competitors.
Is Red Violet's Sloan Ratio % too high?
Red Violet's current Sloan Ratio % is -3.95%. Overall, Red Violet has a GF Score™ of 68/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Red Violet's Sloan Ratio % compare to DFIN and GTM?
Red Violet's Sloan Ratio % of -3.95% can be compared against companies in the Software 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 a Software company?
A good Sloan Ratio % depends on the Software 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 Red Violet and its competitors. Red Violet's current Sloan Ratio % is -3.95%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Red Violet stock overvalued right now?
Based on GuruFocus' analysis, Red Violet (FRA:2KH) is currently considered Significantly Overvalued. The stock's GF Value™ is €40.28, compared to a current price of €61.00 — trading 51.4% above its estimated fair value. The current Sloan Ratio % is -3.95%. Red Violet's overall GF Score™ is 68/100 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 Red Violet (FRA:2KH), the current Sloan Ratio % is -3.95% 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 Red Violet (FRA:2KH) Overvalued in 2026?
Based on GuruFocus' analysis, Red Violet stock appears to be overvalued.
The current stock price of €61.00 is trading 51.4% above its estimated GF Value™ of €40.28.
GuruFocus considers Red Violet to be Significantly Overvalued.
Key valuation signals for FRA:2KH:
Sloan Ratio %: -3.95%
GF Value™: €40.28 vs. price of €61.00 (51.4% above fair value)
No single metric tells the full story. See the FRA:2KH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Red Violet Inc builds proprietary technologies and applies analytical capabilities to deliver identity intelligence. The company's solutions enable the real-time identification and location of people, businesses, assets, and their interrelationships. These solutions are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Its cloud-native, AI-enabled identity intelligence platform, CORE, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. The company generates substantially all of its revenue from licensing its solutions.
68GF 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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