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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.
Spotify Technology's Sloan Ratio for the quarter that ended in Mar. 2026 was 1.85%.
As of Mar. 2026, Spotify Technology has a Sloan Ratio of 1.85%, indicating the company is in the safe zone and there is no funny business with accruals.
Spotify Technology (XSWX:SPOT) 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, Spotify Technology has a Sloan Ratio of 1.85%, indicating the company is in the safe zone and there is no funny business with accruals.
Spotify Technology Sloan Ratio % Related Terms
Spotify Technology Sloan Ratio % Historical Data
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The historical data trend for Spotify Technology'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.
XSWX:SPOT vs NBIS, BIDU, RDDT: Sloan Ratio % Comparison
For the Internet Content & Information subindustry, Spotify Technology'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.
Spotify Technology Sloan Ratio % vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Spotify Technology's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Spotify Technology'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.
Spotify Technology's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Spotify Technology's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was -80.663 (Jun. 2025 ) + 840.016 (Sep. 2025 ) + 1095.504 (Dec. 2025 ) + 656.235 (Mar. 2026 ) = CHF2,511 Mil.
Spotify Technology's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 665.004 (Jun. 2025 ) + 774.609 (Sep. 2025 ) + 798.766 (Dec. 2025 ) + 760.905 (Mar. 2026 ) = CHF2,999 Mil.
Spotify Technology's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -378.931 (Jun. 2025 ) + -409.263 (Sep. 2025 ) + -586.944 (Dec. 2025 ) + 666.247 (Mar. 2026 ) = CHF-709 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.
Spotify Technology (XSWX:SPOT) has a Sloan Ratio % of 1.85% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Spotify Technology and its competitors.
Is Spotify Technology's Sloan Ratio % too high?
Spotify Technology's current Sloan Ratio % is 1.85%. Overall, Spotify Technology has a GF Score™ of 77/100, reflecting its overall financial health beyond just this single metric.
How does Spotify Technology's Sloan Ratio % compare to NBIS and BIDU?
Spotify Technology's Sloan Ratio % of 1.85% can be compared against companies in the Interactive Media 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 an Interactive Media company?
A good Sloan Ratio % depends on the Interactive Media 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 Spotify Technology and its competitors. Spotify Technology's current Sloan Ratio % is 1.85%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Spotify Technology stock overvalued right now?
Spotify Technology (XSWX:SPOT) has a current Sloan Ratio % of 1.85%. The stock's GF Value™ is CHF399.63, compared to a current price of CHF391.50 — trading 2% below its estimated fair value. The current Sloan Ratio % is 1.85%. Spotify Technology's overall GF Score™ is 77/100 with 2 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 Spotify Technology (XSWX:SPOT), the current Sloan Ratio % is 1.85% 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 Spotify Technology (XSWX:SPOT) Overvalued in 2026?
Based on GuruFocus' analysis, Spotify Technology stock appears to be undervalued.
The current stock price of CHF391.50 is trading 2% below its estimated GF Value™ of CHF399.63.
Key valuation signals for XSWX:SPOT:
Sloan Ratio %: 1.85%
GF Value™: CHF399.63 vs. price of CHF391.50 (2% below fair value)
No single metric tells the full story. See the XSWX:SPOT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Spotify is the leading global music streaming service, with over 750 million monthly active users and nearly 300 million paying subscribers, with the latter constituting the firm's premium segment. Most of the firm's revenue and nearly all its gross profit come from subscribers, who pay a monthly fee to access a music library that includes most of the most popular songs ever recorded, including all from the major record labels. The firm also offers access to audiobooks and integrates podcasts within its standard music app. Podcast content is not exclusive and is typically free to access on other platforms. Ad-supported users can access a similar music catalog, but cannot customize a similar on-demand experience.
77GF Score
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