Saratoga Investment (SAR) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 14.11%
• Average Volume (3M): 94.95K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.50
• 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: 126,978
• 30 Day Avg. Volume: 94,950
• 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: 2.96K
• Enterprise Value/Gross Profit: 5.79K
• Enterprise Value/Ebitda: 233.70
• 1Y Price Target: $24.00
• Price Target Upside: 6.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $24.00 ▲(6.24% Upside)

The score is held back primarily by balance-sheet/leverage risk and low confidence from TTM inconsistencies (including negative equity), despite a strong FY2025 rebound. Offsetting factors include attractive valuation (low P/E and high dividend yield), a moderately positive technical backdrop, and an earnings call that points to strong liquidity and credit quality but ongoing near-term earnings pressure and a pending 2026 maturity.

Positive Factors

Strong Liquidity / Dry Powder

Nearly $395.6M of cash, undrawn SBIC debentures and revolvers provides durable optionality to originate or acquire assets without external funding. This capacity can fund meaningful AUM growth (~39% potential) and supports NAV preservation, reducing short-term funding stress over months.

High Credit Quality / Low Nonaccruals

Extremely low nonaccruals and top-tier credit ratings reflect disciplined underwriting and portfolio resilience. Persistent high credit quality should limit impairment losses and support steady interest income and capital preservation through economic cycles, underpinning long-term distributable earnings.

Extended Credit Facility / Funding Flexibility

Replacing prior financing with an $85M facility that extends maturation to 2028 materially improves structural funding flexibility. Longer-dated committed capacity reduces near-term refinancing risk, can lower funding cost volatility, and supports medium-term deployment plans and capital preservation.

Negative Factors

Elevated Leverage and TTM Negative Equity

A debt-to-equity ratio near 2.0 with a TTM snapshot showing negative equity increases sensitivity to asset-value declines and funding shocks. Elevated leverage constrains financial flexibility, raises refinancing and covenant risk, and can pressure dividends or force asset sales during stress periods.

Declining NII and Yield Compression

Material YoY declines in net interest income and portfolio yields reflect lower benchmark rates and tighter spreads. Sustained NII pressure reduces distributable cash flow for dividends and re-investment; unless new originations command higher spreads, earnings durability and payout coverage remain at risk over coming quarters.

Near-Term Debt Maturity / Refinancing Risk

The upcoming $175M note maturity creates immediate refinancing decisions that could deplete cash/dry powder or require capital-market access. If market funding costs rise or capacity tightens, the company may face higher interest expense, reduced deployment flexibility, or potential equity issuance that dilutes stakeholders.

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 Corp generates revenue primarily through interest income from the debt investments it makes in middle-market businesses. These investments typically include first and second lien loans, mezzanine debt, and, to a lesser extent, equity investments. The company also earns money from capital gains when it exits equity positions in successful portfolio companies. Additionally, Saratoga Investment benefits from management and incentive fees, which are tied to the performance of the assets under management, given its role as an investment adviser. This structure allows the company to capitalize on both steady interest income and potential upside from equity investments.

Saratoga Investment Financial Statement Overview

Summary

Mixed fundamentals: FY2025 showed a sharp profitability and cash-flow rebound, but leverage is elevated (debt-to-equity ~2.0) and the TTM snapshot flags major inconsistencies (including negative equity and unusually low margins), reducing confidence in balance-sheet strength and the run-rate view.

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

Saratoga Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAR, the sentiment is Positive. The current price of 22.59 is below the 20-day moving average (MA) of 22.93, above the 50-day MA of 22.28, and above the 200-day MA of 22.46, indicating a bullish trend. The MACD of 0.19 indicates Positive momentum. The RSI at 57.23 is Neutral, neither overbought nor oversold. The STOCH value of 57.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAR.

Saratoga Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCC	77 Outperform	$14.77B	10.37	10.06%	9.64%	10.34%	-24.16%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GAIN	67 Neutral	$552.28M	5.59	18.68%	11.02%	-45.46%	134.73%
NMFC	66 Neutral	$952.13M	14.15	5.43%	14.17%	36.15%	-38.59%
SAR	61 Neutral	―	9.48	9.78%	14.11%	44.71%	52.98%
PNNT	57 Neutral	$397.65M	12.15	6.83%	16.61%	-3.09%	200.66%
TCPC	50 Neutral	$473.41M	-52.76	-1.15%	21.13%	-91.81%	78.46%

Saratoga Investment Corporate Events

Saratoga Investment Secures New $85 Million Credit Facility

On November 6, 2025, Saratoga Investment Corp. and its subsidiary, Saratoga Investment Funding II LLC, entered into a new Credit and Security Agreement with Valley National Bank and other parties, establishing a credit facility of up to $85 million, with potential increases to $100 million. This agreement, which matures in 2028, replaces a previous agreement with Encina Lender Finance, LLC, and includes various financial covenants and security interests, impacting the company’s financial operations and strategic positioning.

The most recent analyst rating on (SAR) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Saratoga Investment stock, see the SAR Stock Forecast page.