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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.
GDS Holdings's Sloan Ratio for the quarter that ended in Mar. 2026 was 3.96%.
As of Mar. 2026, GDS Holdings has a Sloan Ratio of 3.96%, 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 Mar. 2026, GDS Holdings has a Sloan Ratio of 3.96%, indicating the company is in the safe zone and there is no funny business with accruals.
GDS Holdings Sloan Ratio % Related Terms
GDS Holdings Sloan Ratio % Historical Data
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The historical data trend for GDS Holdings'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 Information Technology Services subindustry, GDS Holdings'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.
GDS Holdings Sloan Ratio % vs Software Industry
For the Software industry and Technology sector, GDS Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where GDS Holdings'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.
GDS Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
GDS Holdings's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was -10.069 (Jun. 2025 ) + 101.913 (Sep. 2025 ) + -66.313 (Dec. 2025 ) + 384.31 (Mar. 2026 ) = $410 Mil.
GDS Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 120.484 (Jun. 2025 ) + 103.39 (Sep. 2025 ) + 139.646 (Dec. 2025 ) + 64.957 (Mar. 2026 ) = $428 Mil.
GDS Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -50.767 (Jun. 2025 ) + 41.176 (Sep. 2025 ) + -227.081 (Dec. 2025 ) + -265.98 (Mar. 2026 ) = $-503 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.
GDS Holdings (GDS) has a Sloan Ratio % of 3.96% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on GDS Holdings and its competitors.
Is GDS Holdings' Sloan Ratio % too high?
GDS Holdings' current Sloan Ratio % is 3.96%. Overall, GDS Holdings has a GF Score™ of 65/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does GDS Holdings' Sloan Ratio % compare to PSN and INGM?
GDS Holdings' Sloan Ratio % of 3.96% 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 GDS Holdings and its competitors. GDS Holdings's current Sloan Ratio % is 3.96%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is GDS Holdings stock overvalued right now?
Based on GuruFocus' analysis, GDS Holdings (GDS) is currently considered Significantly Overvalued. The stock's GF Value™ is $21.18, compared to a current price of $32.74 — trading 54.6% above its estimated fair value. The current Sloan Ratio % is 3.96%. GDS Holdings' overall GF Score™ is 65/100 with 5 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 GDS Holdings (GDS), the current Sloan Ratio % is 3.96% as of Mar. 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 GDS Holdings (GDS) Overvalued in 2026?
Based on GuruFocus' analysis, GDS Holdings stock appears to be overvalued.
The current stock price of $32.74 is trading 54.6% above its estimated GF Value™ of $21.18.
GuruFocus considers GDS Holdings to be Significantly Overvalued.
Key valuation signals for GDS:
Sloan Ratio %: 3.96%
GF Value™: $21.18 vs. price of $32.74 (54.6% above fair value)
No single metric tells the full story. See the GDS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
GDS Holdings started as an IT service provider in 2001, then moved to the data center business with its first self-developed data center opening in 2010. The company now develops and operates data centers in China and also builds, operates, and transfers data centers for other clients. It offers colocation and managed services and mainly targets hyperscale cloud service customers who take large areas of its data centers or even whole data centers under long-term contracts. Its data centers are located predominantly in and around the Tier 1 cities in China, and it has also started expanding into Southeast Asia via the now 23% owned DayOne. GDS listed on the Nasdaq in 2016 and completed a secondary listing in Hong Kong in 2020.
65GF Score
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