Saratoga Investment (SAR) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 14.11%
• Average Volume (3M): 141.24K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.56
• Revenue Growth: 44.71%
• EPS Growth: 52.98%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.61
• Shares Outstanding: 16,184,057
• 10 Day Avg. Volume: 165,322
• 30 Day Avg. Volume: 141,236
• PEG Ratio: 0.07
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 3.84
• P/FCF Ratio: 1.83
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: 10.57
• Enterprise Value/Gross Profit: 20.65
• Enterprise Value/Ebitda: 0.83
• 1Y Price Target: $24.00
• Price Target Upside: 3.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.33
• Revenue Forecast (FY): $122.28M

• Rating: 58 Neutral
• Price Target: $23.00 ▼(-0.52% Downside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is held back primarily by balance-sheet risk and data-consistency red flags in the financials, alongside weak technical momentum. These are partly offset by attractive valuation (low P/E and high yield) and a cautiously constructive earnings-call backdrop supported by liquidity and strong credit metrics.

Positive Factors

Strong liquidity / dry powder

Nearly $396M of committed liquidity (cash, undrawn SBIC debentures and revolvers) gives Saratoga durable optionality to fund originations and avoid forced asset sales. This strengthens NAV preservation, enables measured AUM growth without immediate external financing, and reduces short-term refinancing pressure.

High credit quality / low nonaccruals

A portfolio with ~99.8% top-rated credits and minimal nonaccruals is a durable competitive advantage for a middle-market BDC. Lower expected credit losses support steadier interest income, reduce volatility of reserves, and strengthen the sustainability of dividends through economic cycles.

Reliable capital markets access

Issuance of long-dated unsecured notes and a refreshed ATM shelf demonstrate structural access to public funding. By refinancing near-term maturities with longer-dated paper and preserving equity issuance capacity, management materially reduces immediate funding risk and preserves capacity to deploy capital accretively.

Negative Factors

Elevated leverage / balance-sheet red flags

Reported debt-to-equity near 2.0 and a TTM snapshot indicating negative equity are structural concerns. Elevated leverage amplifies sensitivity to mark-to-market asset moves, constrains strategic flexibility, increases vulnerability to funding stress, and could pressure dividend policy under adverse scenarios.

Earnings-to-cash volatility and data inconsistencies

While FY2025 showed positive operating and free cash flow, the history of negative operating cash and very large TTM swings implies persistent earnings-to-cash volatility or classification effects. That undermines confidence in recurring dividend coverage and complicates forecasting of internally generated funds.

Yield compression and NII decline

Material year-over-year declines in adjusted NII and compression of core portfolio yields reflect structural pressure from lower short-term rates and tighter spreads. For an income-focused BDC, sustained yield compression coupled with high repayments can erode recurring net investment income and NII per share over the medium term.

Saratoga Investment Business Overview & Revenue Model

Company Description

Saratoga Investment Corp. is a business development company specializing in leveraged and management buyouts, acquisition financings, growth financings, recapitalization, debt refinancing, and transitional financing transactions at the lower end of middle market companies. It structures its investments as debt and equity by investing through first and second lien loans, mezzanine debt, co-investments, select high yield bonds, senior secured bonds, unsecured bonds, and preferred and common equity. The firm prefers to invest in aerospace, automotive aftermarket and services, business products and services, consumer products and services, education, environmental services, industrial services, financial services, food and beverage, healthcare products and services, logistics, distribution, manufacturing, restaurants services, food services, software services, technology services, specialty chemical, media and telecommunications. It seeks to invest in the United States. The firm primarily invests $5 million to $50 million in companies having EBITDA of $2 million or greater and revenues of $8 million to $250 million. The firm prefer to take a majority stake. It invests through direct lending as well as participation in loan syndicates. The firm was formerly known as GSC Investment Corp. Saratoga Investment Corp. is based in New York, New York with an additional office in Florham Park, New Jersey.

How the Company Makes Money

Saratoga Investment makes money primarily from income and gains generated on its investment portfolio. Key revenue streams typically include: (1) Interest income from debt investments such as first-lien and second-lien loans and other structured credit instruments held in its portfolio; this is generally the largest recurring source of earnings for a BDC. (2) Fee and related income associated with originating, structuring, and managing investments (e.g., upfront/closing fees, amendment fees, prepayment or other contractual fees), where applicable; these fees are commonly recognized over time or when earned, depending on the arrangement. (3) Dividend income from any equity investments and realized/unrealized gains from equity positions or equity-linked features (e.g., warrants) that can accompany debt financings, contributing to capital appreciation when portfolio companies perform well or are sold/refinanced. (4) Potential income related to its externally managed structure through arrangements between the BDC and its investment adviser/manager; specific economics and amounts depend on disclosed advisory agreements. Earnings are influenced by factors such as portfolio credit performance (defaults and recoveries), interest rate levels (particularly for floating-rate assets and any variable-rate liabilities), leverage/funding costs, and the pace of new originations and repayments.

Saratoga Investment Financial Statement Overview

Summary

FY2025 showed a strong rebound in profitability and improved free cash flow, but leverage appears elevated and the TTM set includes major inconsistencies (e.g., negative equity and unusually low margins), lowering confidence in the underlying run-rate picture.

Income Statement

Annual results show a strong rebound in profitability in FY2025, with revenue up ~35% and net profit margin improving to ~30% (from ~13% in FY2024). However, results have been volatile over the cycle (including a slight revenue decline in FY2024 and unusually high margins in earlier years), and the TTM (Trailing-Twelve-Months) dataset shows extremely low reported margins, which raises data-quality/one-time/noise concerns and limits confidence in the run-rate view.

Balance Sheet

Leverage is elevated in the annual filings (debt-to-equity ~2.0 in FY2024–FY2025), which increases sensitivity to asset values and funding conditions. While annual return on equity improved to ~7% in FY2025, the TTM (Trailing-Twelve-Months) snapshot shows negative equity, a major balance-sheet red flag that, if reflective of reality, would materially weaken financial flexibility.

Cash Flow

Cash generation improved meaningfully in FY2025 with positive operating cash flow and free cash flow (~$198M), versus negative operating/free cash flow in FY2021–FY2024. That said, historical cash flow has been consistently negative despite reported net income in those years, pointing to earnings-to-cash volatility. The TTM (Trailing-Twelve-Months) cash flow figures are very large relative to net income and also show weak operating cash flow coverage, suggesting the TTM set may include non-recurring swings or classification effects.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	101.77M	94.16M	69.55M	69.85M	77.46M	39.91M
Gross Profit	52.11M	42.10M	20.36M	36.35M	57.58M	26.32M
EBITDA	1.29B	31.97M	11.70M	26.76M	48.52M	19.94M
Net Income	38.54M	28.09M	8.93M	24.68M	45.74M	14.78M
Balance Sheet
Total Assets	1.20B	1.19B	1.19B	1.08B	876.24M	592.15M
Cash, Cash Equivalents and Short-Term Investments	52.30M	148.22M	8.69M	65.75M	47.26M	18.83M
Total Debt	764.68M	781.82M	803.67M	711.13M	498.88M	274.05M
Total Liabilities	783.76M	798.88M	820.98M	731.20M	520.46M	287.97M
Stockholders Equity	413.21M	392.67M	370.22M	346.96M	355.78M	304.19M
Cash Flow
Free Cash Flow	22.92M	197.54M	-157.21M	-130.37M	-203.13M	-62.35M
Operating Cash Flow	22.92M	197.54M	-157.21M	-130.37M	-203.13M	-62.35M
Investing Cash Flow	-38.45M	0.00	0.00	2.25B	-55.08B	-78.08B
Financing Cash Flow	-65.08M	-33.32M	101.64M	173.58M	226.09M	52.81M

Saratoga Investment Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.12
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAR, the sentiment is Neutral. The current price of 23.12 is above the 20-day moving average (MA) of 22.95, above the 50-day MA of 22.93, and above the 200-day MA of 22.36, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 44.37 is Neutral, neither overbought nor oversold. The STOCH value of 14.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SAR.

Saratoga Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
ARCC	63 Neutral	$13.24B	10.89	9.22%	9.64%	10.34%	-24.16%
GAIN	61 Neutral	$571.45M	2.10	24.70%	11.02%	-45.46%	134.73%
NMFC	61 Neutral	$795.36M	59.29	1.29%	14.17%	36.15%	-38.59%
PNNT	59 Neutral	$312.12M	10.64	5.42%	16.61%	-3.09%	200.66%
SAR	58 Neutral	―	7.82	9.56%	14.11%	44.71%	52.98%
TCPC	53 Neutral	$297.69M	-5.23	-12.44%	21.13%	-91.81%	78.46%

Saratoga Investment Corporate Events

Saratoga Investment Updates At-The-Market Equity Offering Program

On March 13, 2026, Saratoga Investment Corp. and its adviser amended their existing equity distribution agreement with Lucid Capital Markets, Ladenburg Thalmann, Compass Point, and Raymond James to migrate the company’s at-the-market common stock offering program, originally established on July 30, 2021, to a new effective shelf registration statement. The move aligns the at-the-market program with Saratoga’s latest registration framework, enabling continued opportunistic issuance of common shares under the updated prospectus filings, which may support the company’s capital-raising flexibility and liquidity strategy for its investment activities.

The amendment is supported by a legal opinion confirming the validity of any shares issued under the new registration statement and related prospectus documentation. By refreshing the legal and regulatory underpinnings of its at-the-market facility, Saratoga Investment reinforces its ability to access public equity markets efficiently, which can influence its funding costs, balance-sheet management, and capacity to deploy capital into middle-market credit and equity investments.

The most recent analyst rating on (SAR) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Saratoga Investment stock, see the SAR Stock Forecast page.

Saratoga Investment Completes $100 Million Unsecured Notes Offering

On February 6, 2026, Saratoga Investment Corp. closed a $100 million public offering of 7.50% unsecured notes due 2031, issued under a supplemental indenture with U.S. Bank Trust Company as trustee. The notes, which pay interest quarterly beginning May 31, 2026 and are callable at par on or after February 6, 2028, generated net proceeds of about $96.4 million that the company plans to use, together with available cash, to repay its 4.375% notes maturing on February 28, 2026; the new debt ranks pari passu with other unsecured, unsubordinated obligations and is subject to leverage and reporting covenants tied to the Investment Company Act, shaping the firm’s capital structure and creditor protections.

The most recent analyst rating on (SAR) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Saratoga Investment stock, see the SAR Stock Forecast page.

Saratoga Investment Announces New 7.50% Notes Offering

On January 29, 2026, Saratoga Investment Corp. entered into an underwriting agreement with Saratoga Investment Advisors, LLC and Lucid Capital Markets, LLC, as representative of the underwriters, for a public offering of $100 million aggregate principal amount of 7.50% notes due 2031, with an option for underwriters to purchase up to an additional $15 million of notes within 30 days of the final prospectus supplement date. The notes, which the company intends to list on the New York Stock Exchange under the symbol “SAV” within 30 days of the original issue date, are expected to close on February 6, 2026, subject to customary conditions, reinforcing Saratoga Investment’s access to long-term capital markets and adding a new fixed-income security to its capital structure under standard indemnification and liability allocation terms between the company and underwriters.

The most recent analyst rating on (SAR) stock is a Hold with a $24.50 price target. To see the full list of analyst forecasts on Saratoga Investment stock, see the SAR Stock Forecast page.

Saratoga Investment Issues New Senior Unsecured Notes

On January 23, 2026, Saratoga Investment Corp. entered into a Registration Rights Agreement tied to its issuance and sale of 7.25% Senior Unsecured Notes due May 1, 2030, committing to register an exchange offer for substantially identical registered debt within 365 days of the notes’ initial issuance or pay additional interest if it fails to meet these obligations. The same day, the company executed a Note Purchase Agreement for a $50 million private placement of the notes at 99.117% of par, yielding net proceeds of about $48.5 million after fees, with the notes maturing in 2030, redeemable at par plus a make-whole premium before January 23, 2028 and at par thereafter, ranking pari passu with other unsecured unsubordinated debt, and with proceeds earmarked to redeem its outstanding 4.375% Notes due 2026 and for general corporate purposes.

The most recent analyst rating on (SAR) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Saratoga Investment stock, see the SAR Stock Forecast page.