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.
Lumentum Holdings's Sloan Ratio for the quarter that ended in Mar. 2026 was 7.64%.
As of Mar. 2026, Lumentum Holdings has a Sloan Ratio of 7.64%, indicating the company is in the safe zone and there is no funny business with accruals.
Lumentum Holdings (XSWX:LITE1) 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, Lumentum Holdings has a Sloan Ratio of 7.64%, indicating the company is in the safe zone and there is no funny business with accruals.
Lumentum Holdings Sloan Ratio % Related Terms
Lumentum Holdings Sloan Ratio % Historical Data
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The historical data trend for Lumentum 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 Communication Equipment subindustry, Lumentum 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.
Lumentum Holdings Sloan Ratio % vs Hardware Industry
For the Hardware industry and Technology sector, Lumentum Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lumentum 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.
Lumentum Holdings's Sloan Ratio for the fiscal year that ended in Jun. 2025 is calculated as
Lumentum Holdings's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 173.456 (Jun. 2025 ) + 3.344 (Sep. 2025 ) + 62.318 (Dec. 2025 ) + 113.529 (Mar. 2026 ) = CHF353 Mil.
Lumentum Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 52.045 (Jun. 2025 ) + 46.094 (Sep. 2025 ) + 100.967 (Dec. 2025 ) + 160.452 (Mar. 2026 ) = CHF360 Mil.
Lumentum Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -48.304 (Jun. 2025 ) + -53.976 (Sep. 2025 ) + -184.403 (Dec. 2025 ) + -143.21 (Mar. 2026 ) = CHF-430 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.
Lumentum Holdings (XSWX:LITE1) has a Sloan Ratio % of 7.64% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Lumentum Holdings and its competitors.
Is Lumentum Holdings' Sloan Ratio % too high?
Lumentum Holdings' current Sloan Ratio % is 7.64%. Overall, Lumentum Holdings has a GF Score™ of 61/100, reflecting its overall financial health beyond just this single metric.
How does Lumentum Holdings' Sloan Ratio % compare to ?
Lumentum Holdings' Sloan Ratio % of 7.64% can be compared against companies in the Hardware 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 Hardware company?
A good Sloan Ratio % depends on the Hardware 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 Lumentum Holdings and its competitors. Lumentum Holdings's current Sloan Ratio % is 7.64%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lumentum Holdings stock overvalued right now?
Lumentum Holdings (XSWX:LITE1) has a current Sloan Ratio % of 7.64%. The stock's GF Value™ is CHF79.46, compared to a current price of CHF604.50 — trading 660.8% above its estimated fair value. The current Sloan Ratio % is 7.64%. Lumentum Holdings' overall GF Score™ is 61/100 with 4 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 Lumentum Holdings (XSWX:LITE1), the current Sloan Ratio % is 7.64% 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 Lumentum Holdings (XSWX:LITE1) Overvalued in 2026?
Based on GuruFocus' analysis, Lumentum Holdings stock appears to be overvalued.
The current stock price of CHF604.50 is trading 660.8% above its estimated GF Value™ of CHF79.46.
Key valuation signals for XSWX:LITE1:
Sloan Ratio %: 7.64%
GF Value™: CHF79.46 vs. price of CHF604.50 (660.8% above fair value)
No single metric tells the full story. See the XSWX:LITE1 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lumentum Holdings Inc is a California-based technology firm. The company provides two types of optical and photonic products: optical components that are used in telecommunications networking equipment, and commercial lasers for manufacturing, inspection, and life-science lab uses. Its segments are Optical Communications and Commercial Lasers. The firm is also expanding into new optical applications, such as 3-D sensing laser diode for consumer electronics. It generates maximum revenue from the OpComms segment. The OpComms segment products include a wide range of components, modules, and subsystems to support customers including carrier networks for access (local), metro (intracity), long-haul, and submarine (undersea) applications.
61GF Score
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