Saratoga Investment (SAR)
NYSE:SAR
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Saratoga Investment
(NYSE:SAR)
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Rating:59Neutral
Price Target:
$25.00
â–²(8.13% Upside)
Action:Reiterated
Date:05/06/26
The score is held back mainly by higher balance-sheet risk (elevated leverage/negative equity snapshot) and inconsistent cash generation, despite strong 2025 profitability and revenue momentum. Technicals are supportive with the stock trading above key moving averages, and valuation looks attractive with a low P/E and very high yield. The latest earnings call was mixed: solid credit metrics and liquidity, but NAV decline, markdowns (notably CLO-related), and NII/yield pressure.
Positive Factors
Origination momentum and AUM growth
Consistent origination activity that outpaced repayments and rising AUM signal durable capacity to deploy capital into income-generating loans. Sustained deal flow and ability to scale assets support recurring interest income and reduce dependency on market timing for growth.
Negative Factors
Elevated leverage and negative equity snapshot
High leverage magnifies returns but increases vulnerability to markdowns and rising funding costs. A negative equity snapshot weakens capital cushions, could constrain regulatory/Investment Company Act leverage flexibility, and raises refinancing and dividend sustainability risk in adverse markets.
Read all positive and negative factors
Positive Factors
Negative Factors
Origination momentum and AUM growth
Consistent origination activity that outpaced repayments and rising AUM signal durable capacity to deploy capital into income-generating loans. Sustained deal flow and ability to scale assets support recurring interest income and reduce dependency on market timing for growth.
Read all positive factors
Saratoga Investment (SAR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$364.56M
Dividend Yield14.11%
Average Volume (3M)104.45K
Price to Earnings (P/E)9.7
Beta (1Y)0.60
Revenue Growth23.06%
EPS Growth13.99%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)2.33
Shares Outstanding16,267,748
10 Day Avg. Volume90,314
30 Day Avg. Volume104,454
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)0.93
Price to Sales (P/S)3.70
P/FCF Ratio-4.17
Enterprise Value/Market Cap2.95
Enterprise Value/Revenue10.83
Enterprise Value/Gross Profit21.52
Enterprise Value/Ebitda28.21
Forecast
1Y Price Target
$25.00Price Target Upside8.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.25
Revenue Forecast (FY)$126.01M
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 o...
How the Company Makes Money
Saratoga Investment makes money primarily from investment income generated on its portfolio of middle-market investments. Its key revenue streams typically include: (1) Interest income from debt investments: The largest source of earnings generall...
Saratoga Investment Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 14, 2026
Earnings Call Sentiment Positive
The call emphasized resilient core credit quality, strong origination momentum and AUM growth, ample liquidity, and ROE materially above industry averages — offset by margin pressure from lower base rates and tighter spreads, several quarter-specific markdowns (notably CLO/JV depreciation and a CLO F note nonaccrual/write-down), a large decline in cash due to deployment and refinancing, and a one-time excise tax. Management pointed to disciplined underwriting, a growing pipeline and business development success as reasons for optimism while acknowledging near-term yield and CLO-related challenges.Positive Updates
Strong Originations and Net Deployment
Q4 originations of $135.1M (5 new investments of $78.4M + 15 follow-ons of $55.2M) produced net originations of $101.1M as originations outpaced repayments; fiscal year originations totaled $309.5M.
Negative Updates
NAV per Share Decline and Distributions Exceeding NII
Quarter-end NAV was $396.2M; NAV per share $24.42, down $1.44 YoY and down $1.17 QoQ. Twelve‑month NII was $2.32 vs total dividend distributions of $3.74, with $1.42 of distributions in excess of NII (representing previously undistributed profits).
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Originations and Net Deployment
Q4 originations of $135.1M (5 new investments of $78.4M + 15 follow-ons of $55.2M) produced net originations of $101.1M as originations outpaced repayments; fiscal year originations totaled $309.5M.
Read all positive updates
Company Guidance
Management guided that it will maintain a monthly base dividend of $0.25 per share (quarterly $0.75; annualized yield ~12.6% at a $23.89 share price) with the Board to reevaluate quarterly, and highlighted expectations for base rates/SOFR to stabilize (which should help NII); reported adjusted NII of $8.5M ($0.53 per share; $0.61 excluding a $1.7M excise tax) and an adjusted NII yield of 8.4%. They plan to continue disciplined deployment of capital—AUM was $1.109B with net originations of $101.1M in Q4 (from $135.1M new originations and 15 follow‑ons), and $210.8M of available liquidity/dry powder (≈$21.8M cash, $99M undrawn SBA debentures, $90M revolvers) that can fund roughly 19% asset growth without external financing—while keeping regulatory leverage at 168.4% and managing liability refinancing (refinanced $175M notes with $150M at ~7.5% and a subsequent $25M at 7.25%, with $169M of baby bonds callable). They reiterated portfolio/credit guidance focused on preservation—core first‑lien exposure 82.1%, weighted average core BDC yield 10.4%, latest 12‑month ROE 9.1% (long‑term ROE 10.1% vs industry 6.7%), NAV $396.2M ($24.42/share), two nonaccruals representing 0.2% of fair value/1.2% of cost (versus a 3.3% industry nonaccrual rate), and a Q4 portfolio markdown of 1% ($9.6M) while core non‑CLO portfolio remains 1.6% above cost.Saratoga Investment Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
32
Negative
Cash Flow
38
Negative
| Breakdown | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 99.22M | 94.16M | 69.55M | 69.85M | 77.46M |
| Gross Profit | 49.92M | 42.10M | 20.36M | 36.35M | 57.58M |
| EBITDA | 38.09M | 31.97M | 11.70M | 26.76M | 48.52M |
| Net Income | 36.60M | 28.09M | 8.93M | 24.68M | 45.74M |
Balance Sheet | |||||
| Total Assets | 1.14B | 1.19B | 1.19B | 1.08B | 876.24M |
| Cash, Cash Equivalents and Short-Term Investments | 21.79M | 148.22M | 8.69M | 65.75M | 47.26M |
| Total Debt | 729.86M | 781.82M | 803.67M | 711.13M | 498.88M |
| Total Liabilities | 744.95M | 798.88M | 820.98M | 731.20M | 520.46M |
| Stockholders Equity | 396.16M | 392.67M | 370.22M | 346.96M | 355.78M |
Cash Flow | |||||
| Free Cash Flow | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Operating Cash Flow | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Investing Cash Flow | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financing Cash Flow | -94.91M | -33.32M | 101.64M | 173.58M | 226.09M |
Saratoga Investment Technical Analysis
Positive
23.12
Price Trends
22.03
Positive
22.09
Positive
21.70
Positive
Market Momentum
0.07
Negative
53.52
Neutral
31.91
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 23.12 is above the 20-day moving average (MA) of 22.06, above the 50-day MA of 22.03, and above the 200-day MA of 21.70, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 31.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAR.
Saratoga Investment Risk Analysis
Saratoga Investment disclosed 85 risk factors in its most recent earnings report. Saratoga Investment reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Saratoga Investment Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $13.57B | 11.73 | 8.11% | 9.64% | 14.51% | -20.45% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $629.59M | 3.14 | 34.04% | 11.02% | -54.43% | 163.70% | |
59 Neutral | $364.56M | 9.68 | 9.06% | 14.11% | 23.06% | 13.99% | |
54 Neutral | $756.56M | -13.60 | -4.83% | 14.17% | -24.31% | -157.16% | |
54 Neutral | $319.67M | -2.46 | -19.08% | 21.13% | -153.69% | -168.78% | |
50 Neutral | $263.14M | 17.88 | 0.01% | 16.61% | 122.81% | 43.00% |
* Financial Sector Average
SAR
Saratoga Investment
22.36
1.34
6.37%
GAIN
Gladstone Investment
15.35
2.28
17.44%
NMFC
New Mountain Finance
7.83
-1.59
-16.88%
PNNT
Pennantpark Investment
3.86
-2.02
-34.31%
ARCC
Ares Capital
18.79
-1.43
-7.08%
TCPC
BlackRock TCP Capital
3.68
-3.01
-45.01%
Saratoga Investment Corporate Events
Private Placements and Financing
Saratoga Investment Issues New Unsecured Notes Due 2029
Positive
Apr 14, 2026
On April 10, 2026, Saratoga Investment Corp. privately issued $25 million of 7.25% unsecured notes due 2029 to an institutional investor, with potential to increase the issuance to a total of $50 million by July 10, 2026. The notes, which closed o...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Saratoga Investment Updates At-The-Market Equity Offering Program
Positive
Mar 13, 2026
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 ...
Business Operations and StrategyPrivate Placements and Financing
Saratoga Investment Completes $100 Million Unsecured Notes Offering
Positive
Feb 6, 2026
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 beginnin...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.