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.
Applied Energetics's Sloan Ratio for the quarter that ended in Mar. 2026 was -69.54%.
Warning Sign:
When sloan ratio (-48.54)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Mar. 2026, Applied Energetics has a Sloan Ratio of -69.54%, indicating earnings are more likely to be made up of accruals.
Applied Energetics (OTCPK:AERG) 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, Applied Energetics has a Sloan Ratio of -69.54%, indicating earnings are more likely to be made up of accruals.
Applied Energetics Sloan Ratio % Related Terms
Applied Energetics Sloan Ratio % Historical Data
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The historical data trend for Applied Energetics'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.
AERG vs MVIS, ARBE, USBC: Sloan Ratio % Comparison
For the Scientific & Technical Instruments subindustry, Applied Energetics'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.
Applied Energetics Sloan Ratio % vs Hardware Industry
For the Hardware industry and Technology sector, Applied Energetics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Applied Energetics'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.
Applied Energetics's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Applied Energetics's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was -3.786 (Jun. 2025 ) + -3.971 (Sep. 2025 ) + -4.01 (Dec. 2025 ) + -3.808 (Mar. 2026 ) = $-15.58 Mil.
Applied Energetics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was -2.396 (Jun. 2025 ) + -2.49 (Sep. 2025 ) + -2.62 (Dec. 2025 ) + -2.296 (Mar. 2026 ) = $-9.80 Mil.
Applied Energetics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -1.037 (Jun. 2025 ) + -0.03 (Sep. 2025 ) + -0.053 (Dec. 2025 ) + -0.043 (Mar. 2026 ) = $-1.16 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.
Applied Energetics (AERG) has a Sloan Ratio % of -69.54% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Applied Energetics and its competitors.
Is Applied Energetics' Sloan Ratio % too high?
Applied Energetics' current Sloan Ratio % is -69.54%. Overall, Applied Energetics has a GF Score™ of 26/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Applied Energetics' Sloan Ratio % compare to MVIS and ARBE?
Applied Energetics' Sloan Ratio % of -69.54% 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 Applied Energetics and its competitors. Applied Energetics's current Sloan Ratio % is -69.54%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Applied Energetics stock overvalued right now?
Based on GuruFocus' analysis, Applied Energetics (AERG) is currently considered Significantly Overvalued. The stock's GF Value™ is $0.33, compared to a current price of $1.25 — trading 278.8% above its estimated fair value. The current Sloan Ratio % is -69.54%. Applied Energetics' overall GF Score™ is 26/100 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 Applied Energetics (AERG), the current Sloan Ratio % is -69.54% 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 Applied Energetics (AERG) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Energetics stock appears to be overvalued.
The current stock price of $1.25 is trading 278.8% above its estimated GF Value™ of $0.33.
GuruFocus considers Applied Energetics to be Significantly Overvalued.
Key valuation signals for AERG:
Sloan Ratio %: -69.54%
GF Value™: $0.33 vs. price of $1.25 (278.8% above fair value)
No single metric tells the full story. See the AERG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Applied Energetics Inc specializes in laser and photonics systems, particularly fiber-based ultrashort pulse (USP) laser technologies. Its powerful, dual-use systems are designed for integration and deployment on numerous potential defense platforms for the delivery of high-intensity, ultrashort pulses of light to disable or destroy a target or disrupt a mission. These technologies have applications in both national security and commercial markets. The company operates as one operating segment with a focus on the development and manufacture of high-performance lasers and optical systems, and integrated guided energy systems, for prospective defense, national security, industrial, biomedical, and scientific customers across the world.
26GF Score
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