Saratoga Investment (SAR) AI Stock Analysis

• Market Cap: $359.54M
• Dividend Yield: 14.4%
• Average Volume (3M): 109.55K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.42
• Revenue Growth: -24.05%
• EPS Growth: 28.25%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 72
• Industry: Asset Management
• EPS (TTM): 0.66
• Shares Outstanding: 15,668,131
• 10 Day Avg. Volume: 133,983
• 30 Day Avg. Volume: 109,549
• PEG Ratio: 0.84
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: <0.01
• Enterprise Value/Market Cap: 1.61K
• Enterprise Value/Revenue: 8.96K
• Enterprise Value/Gross Profit: 31.55K
• Enterprise Value/Ebitda: -60.09K
• 1Y Price Target: $24.81
• Price Target Upside: 0.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 68 Neutral
• Price Target: ―

Saratoga Investment's overall score reflects strong technical indicators and attractive valuation, balanced by mixed financial performance and earnings call sentiment. Revenue growth and operational efficiency are strengths, but low net margins and high leverage pose risks. The stock's upward price momentum and high dividend yield provide additional support for the score.

Positive Factors

Investment Portfolio Growth

Analyst expects SAR's investment portfolio to grow to support EPS/NII and cover the dividend, indicating confidence in future performance.

Total Return Projection

Over the next four quarters, the analyst expects a dividend yield of 12.3% and stock price appreciation, resulting in an estimated 12-month total return of about 23%.

Negative Factors

Core Net Investment Income

Core net investment income fell below the new dividend level due to previous rate cuts and a smaller average investment portfolio.

Net Asset Value

The net asset value was down by 4% due to a net loss and dividends, resulting in a lower price target.

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

Saratoga Investment shows strong revenue growth and operational efficiency, as evidenced by high gross and EBIT margins. However, low net profit margins imply potential challenges with non-operational costs. The balance sheet suggests moderate leverage with a stable equity base. Cash flows have improved significantly, but historical volatility indicates potential liquidity risks. Overall, the company is on a positive trajectory with opportunities for improved profitability.

Income Statement

The income statement shows a strong gross profit margin at 99.84% for the TTM, indicating efficient cost management relative to revenue. However, the net profit margin is relatively low at 0.07%, highlighting potential issues with higher non-operating expenses or taxes. Revenue growth is robust, with substantial increases over the periods, particularly between the latest TTM and previous periods. EBIT and EBITDA margins are positive, showing operational efficiency, but the low net income impacts profitability.

Balance Sheet

The balance sheet indicates a healthy equity position, with a debt-to-equity ratio of 2.06, which is manageable but slightly on the higher side for asset management firms, suggesting moderate leverage. The return on equity is modest at 6.73%, reflecting average profitability on shareholder investments. The equity ratio of 30.73% is stable, indicating a solid equity foundation relative to total assets.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow, with a remarkable growth rate in the TTM. The operating cash flow to net income ratio is robust at 3733.47, highlighting strong cash generation relative to net income. However, historical negative operating cash flows and high capital expenditures could pose liquidity risks if not managed.

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	65.75B	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	96.46B	-157.21M	-130.37M	-203.13M	-62.35M
Operating Cash Flow	96.46B	-157.21M	-130.37M	-203.13M	-62.35M
Investing Cash Flow	144.04M	0.00	2.25B	-55.08B	-78.08B
Financing Cash Flow	-87.29B	101.64M	173.58M	226.09M	52.81M

Saratoga Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.80
• 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 24.8 is below the 20-day moving average (MA) of 25.02, above the 50-day MA of 24.52, and above the 200-day MA of 23.23, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 49.09 is Neutral, neither overbought nor oversold. The STOCH value of 21.43 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	$359.54M	10.12	9.27%	14.40%	-24.05%	28.25%
Sector *	67 Neutral	$17.06B	11.24	9.31%	3.84%	11.08%	-3.39%
SCM	64 Neutral	$409.19M	10.07	10.83%	11.23%	17.67%	128.48%
TPVG	59 Neutral	$284.85M	7.65	10.68%	17.42%	22.53%	―
NEWT	58 Neutral	$311.36M	5.91	18.20%	6.67%	9.20%	17.37%
PSBD	54 Neutral	$443.84M	27.26	3.05%	12.74%	1.13%	-86.09%
PNNT	48 Neutral	$477.31M	49.43	1.95%	13.22%	―	-66.59%