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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.
As of Mar. 2026, West Pharmaceutical Services has a Sloan Ratio of 2.06%, indicating the company is in the safe zone and there is no funny business with accruals.
West Pharmaceutical Services (NYSE:WST) Sloan Ratio % Explanation
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, West Pharmaceutical Services has a Sloan Ratio of 2.06%, indicating the company is in the safe zone and there is no funny business with accruals.
West Pharmaceutical Services Sloan Ratio % Related Terms
West Pharmaceutical Services Sloan Ratio % Historical Data
* 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 Medical Instruments & Supplies subindustry, West Pharmaceutical Services'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.
West Pharmaceutical Services Sloan Ratio % vs Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, West Pharmaceutical Services's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where West Pharmaceutical Services's Sloan Ratio % falls into.
West Pharmaceutical Services Sloan Ratio % Calculation
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.
West Pharmaceutical Services's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 131.8 (Jun. 2025 ) + 140 (Sep. 2025 ) + 132.1 (Dec. 2025 ) + 138.8 (Mar. 2026 ) = $543 Mil.
West Pharmaceutical Services's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 177.1 (Jun. 2025 ) + 197.2 (Sep. 2025 ) + 251.1 (Dec. 2025 ) + 89.9 (Mar. 2026 ) = $715 Mil.
West Pharmaceutical Services's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -75.2 (Jun. 2025 ) + -63.3 (Sep. 2025 ) + -76.1 (Dec. 2025 ) + -42.7 (Mar. 2026 ) = $-257 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.
West Pharmaceutical Services (WST) has a Sloan Ratio % of 2.06% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on West Pharmaceutical Services and its competitors.
Is West Pharmaceutical Services' Sloan Ratio % too high?
West Pharmaceutical Services' current Sloan Ratio % is 2.06%. Overall, West Pharmaceutical Services has a GF Score™ of 95/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does West Pharmaceutical Services' Sloan Ratio % compare to RMD and MDLN?
West Pharmaceutical Services' Sloan Ratio % of 2.06% can be compared against companies in the Medical Devices & Instruments 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 Medical Devices & Instruments company?
A good Sloan Ratio % depends on the Medical Devices & Instruments 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 West Pharmaceutical Services and its competitors. West Pharmaceutical Services's current Sloan Ratio % is 2.06%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is West Pharmaceutical Services stock overvalued right now?
Based on GuruFocus' analysis, West Pharmaceutical Services (WST) is currently considered Fairly Valued. The stock's GF Value™ is $362.80, compared to a current price of $352.32 — trading 2.9% below its estimated fair value. The current Sloan Ratio % is 2.06%. West Pharmaceutical Services' overall GF Score™ is 95/100 with 9 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 West Pharmaceutical Services (WST), the current Sloan Ratio % is 2.06% 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 West Pharmaceutical Services (WST) Overvalued in 2026?
Based on GuruFocus' analysis, West Pharmaceutical Services stock appears to be undervalued.
The current stock price of $352.32 is trading 2.9% below its estimated GF Value™ of $362.80.
GuruFocus considers West Pharmaceutical Services to be Fairly Valued.
Key valuation signals for WST:
Sloan Ratio %: 2.06%
GF Value™: $362.80 vs. price of $352.32 (2.9% below fair value)
No single metric tells the full story. See the WST stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
West Pharmaceutical Services is based in Pennsylvania and is a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. West sells elastomer-based packaging components (including stoppers, seals, and plungers), nonglass containment solutions, and auto-injectors for injectable drugs, which include large-molecule biologics, peptides such as GLP-1 receptor agonists, and small-molecule drugs. The company reports in two segments: proprietary products (about 80% of total revenue) and contract-manufactured products (about 20% of total revenue). It generates approximately 55% of its revenue from international markets and 45% from the United States.
95GF Score
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