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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 Apr. 2026, The Descartes Systems Group has a Sloan Ratio of -1.88%, indicating the company is in the safe zone and there is no funny business with accruals.
The Descartes Systems Group (STU:DC2) 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 Apr. 2026, The Descartes Systems Group has a Sloan Ratio of -1.88%, indicating the company is in the safe zone and there is no funny business with accruals.
The Descartes Systems Group Sloan Ratio % Related Terms
The Descartes Systems Group 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.
STU:DC2 vs QH, SHOP, UBER: Sloan Ratio % Comparison
For the Software - Application subindustry, The Descartes Systems Group'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.
The Descartes Systems Group Sloan Ratio % vs Software Industry
For the Software industry and Technology sector, The Descartes Systems Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The Descartes Systems Group's Sloan Ratio % falls into.
The Descartes Systems Group 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.
The Descartes Systems Group's Net Income for the trailing twelve months (TTM) ended in Apr. 2026 was 32.583 (Jul. 2025 ) + 37.709 (Oct. 2025 ) + 38.809 (Jan. 2026 ) + 41.447 (Apr. 2026 ) = €150.5 Mil.
The Descartes Systems Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Apr. 2026 was 54.279 (Jul. 2025 ) + 63.016 (Oct. 2025 ) + 64.631 (Jan. 2026 ) + 64.248 (Apr. 2026 ) = €246.2 Mil.
The Descartes Systems Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Apr. 2026 was -3.014 (Jul. 2025 ) + -32.824 (Oct. 2025 ) + -1.219 (Jan. 2026 ) + -27.619 (Apr. 2026 ) = €-64.7 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.
The Descartes Systems Group (STU:DC2) has a Sloan Ratio % of -1.88% as of Apr. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on The Descartes Systems Group and its competitors.
Is The Descartes Systems Group's Sloan Ratio % too high?
The Descartes Systems Group's current Sloan Ratio % is -1.88%. Overall, The Descartes Systems Group has a GF Score™ of 94/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does The Descartes Systems Group's Sloan Ratio % compare to QH and SHOP?
The Descartes Systems Group's Sloan Ratio % of -1.88% 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 The Descartes Systems Group and its competitors. The Descartes Systems Group's current Sloan Ratio % is -1.88%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Descartes Systems Group stock overvalued right now?
Based on GuruFocus' analysis, The Descartes Systems Group (STU:DC2) is currently considered Significantly Undervalued. The stock's GF Value™ is €102.11, compared to a current price of €67.35 — trading 34% below its estimated fair value. The current Sloan Ratio % is -1.88%. The Descartes Systems Group's overall GF Score™ is 94/100 with 1 warning sign 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 The Descartes Systems Group (STU:DC2), the current Sloan Ratio % is -1.88% as of Apr. 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 The Descartes Systems Group (STU:DC2) Overvalued in 2026?
Based on GuruFocus' analysis, The Descartes Systems Group stock appears to be undervalued.
The current stock price of €67.35 is trading 34% below its estimated GF Value™ of €102.11.
GuruFocus considers The Descartes Systems Group to be Significantly Undervalued.
Key valuation signals for STU:DC2:
Sloan Ratio %: -1.88%
GF Value™: €102.11 vs. price of €67.35 (34% below fair value)
No single metric tells the full story. See the STU:DC2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Descartes Systems Group provides a software solution that allows users in the shipping industry to communicate with one another. Its core product is the Global Logistics Network, which is best understood as transaction-driven. Descartes charges clients to send/receive messages, data, and documents on the GLN. Customers typically contract for a monthly minimum over a multiyear period. The GLN platform allows Descartes to upsell additional software modules as well, typically provided via a software-as-a-service model.
94GF 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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