Saratoga Investment (SAR) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 14.11%
• Average Volume (3M): 115.93K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.54
• 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: 131,015
• 30 Day Avg. Volume: 115,929
• 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: 10.72
• Enterprise Value/Gross Profit: 20.93
• Enterprise Value/Ebitda: 0.85
• 1Y Price Target: $24.00
• Price Target Upside: 3.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.48
• Revenue Forecast (FY): $125.44M

• Rating: 68 Neutral
• Price Target: $26.00 ▲(12.46% Upside)

The score is driven primarily by improved profitability and cash flow in FY2025 but held back by leverage concerns and TTM balance-sheet/margin inconsistencies. Valuation is supportive (low P/E and very high yield) and technicals show a clear uptrend. Earnings call commentary was mixed—strong liquidity and credit quality, but notable YoY NII pressure and an upcoming maturity—while recent financing events modestly de-risk near-term funding.

Positive Factors

Liquidity / Dry Powder

Large liquid cushion (~$396M) provides durable optionality to deploy accretively without immediate external financing, allowing meaningful AUM growth (~39% potential) and NAV support. This reduces refinancing dependency and preserves dividend flexibility during cycles.

Credit Quality / Low Nonaccruals

Extremely low nonaccruals and a top‑rated core portfolio materially lower expected credit losses long term. For a BDC, this supports stable interest income, fewer provisions, more predictable NAV and greater confidence in sustaining distributions through economic variability.

Extended Credit Facility

An extended, lower‑spread $85M facility lengthens maturities and reduces near‑term covenant and rollover risk. Structurally this improves funding optionality for originations and reduces immediate refinancing exposure, enhancing balance sheet stability over the medium term.

Negative Factors

Elevated Leverage / Balance Sheet Risk

High leverage (~2.0 D/E) increases sensitivity to asset value declines and funding stress; reported TTM negative equity (if accurate) materially weakens capital buffers and limits strategic flexibility, heightening risk to NAV and the firm's ability to absorb credit shocks.

NII Declines & Yield Compression

Sustained yield compression meaningfully reduces core interest income for a floating‑rate, spread‑dependent BDC. Recovering earnings requires redeploying dry powder into higher‑spread assets or higher portfolio yields; if spreads remain tight, dividend coverage and long‑term earnings will be pressured.

Rising Operating Costs & Share Dilution

Higher operating expenses and ongoing share issuance dilute NII per share and NAV per share over time, forcing the firm to generate stronger investment returns just to maintain per‑share payouts. Structural reliance on equity issuance reduces long‑term payout resilience if earnings don't recover.

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

FY2025 showed a strong rebound (revenue up ~35%, net margin ~30%) and improved cash generation (positive operating cash flow and ~+$198M FCF). Offsetting this, the balance sheet is a key risk with elevated leverage (debt-to-equity ~2.0) and the TTM snapshot flagging negative equity and unusually low margins, reducing confidence in the 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	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: 23.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 23.12 is above the 20-day moving average (MA) of 23.11, above the 50-day MA of 22.68, and above the 200-day MA of 22.39, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 60.00 is Neutral, neither overbought nor oversold. The STOCH value of 61.79 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
SAR	68 Neutral	―	9.56	9.78%	14.11%	44.71%	52.98%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NMFC	67 Neutral	$867.54M	12.89	5.43%	14.17%	36.15%	-38.59%
ARCC	62 Neutral	$14.00B	10.53	10.06%	9.64%	10.34%	-24.16%
GAIN	60 Neutral	$559.10M	4.52	22.16%	11.02%	-45.46%	134.73%
PNNT	54 Neutral	$377.41M	11.53	6.83%	16.61%	-3.09%	200.66%
TCPC	50 Neutral	$431.84M	-46.30	-1.15%	21.13%	-91.81%	78.46%

Saratoga Investment Corporate Events

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.

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.