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Saratoga Investment
(NYSE:SAR)
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Rating:56Neutral
Price Target:
$19.50
â–²(2.96% Upside)
Action:Reiterated
Date:08/20/26
The score is held back primarily by weak cash-flow quality, high leverage, and negative technical trend signals. Offsetting factors include strong headline shareholder yield and mid-range earnings multiple, plus earnings-call commentary showing solid liquidity and credit metrics despite clear near-term pressure on NII, NAV, and dividend coverage.
Positive Factors
AUM Growth and Origination Capacity
Growing AUM and positive net originations indicate continued demand for Saratoga’s middle-market financing. Sustained deployment activity can expand the interest-earning asset base and support longer-term revenue growth if underwriting discipline is maintained.
Negative Factors
Elevated Leverage and Weak Cash Generation
High leverage increases sensitivity to credit losses, funding costs and asset-value declines. Negative and volatile cash flow further reduces financial predictability, making Saratoga more dependent on portfolio repayments, borrowing capacity and liquidity management.
Read all positive and negative factors
Positive Factors
Negative Factors
AUM Growth and Origination Capacity
Growing AUM and positive net originations indicate continued demand for Saratoga’s middle-market financing. Sustained deployment activity can expand the interest-earning asset base and support longer-term revenue growth if underwriting discipline is maintained.
Read all positive factors
Saratoga Investment (SAR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$300.87M
Dividend Yield16.05%
Average Volume (3M)171.02K
Price to Earnings (P/E)18.7
Beta (1Y)0.55
Revenue Growth2.09%
EPS Growth-59.51%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.00
Shares Outstanding16,080,915
10 Day Avg. Volume183,621
30 Day Avg. Volume171,019
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 Cap3.54
Enterprise Value/Revenue10.59
Enterprise Value/Gross Profit18.71
Enterprise Value/Ebitda22.87
Forecast
1Y Price Target
$22.00Price Target Upside16.16% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.95
Revenue Forecast (FY)$125.69M
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 generally makes money from the income and gains generated by its investment portfolio, consistent with a BDC/RIC model.
1) Interest income on debt investments (core revenue stream)
- The primary driver of earnings is interest ...
Saratoga Investment Earnings Call Summary
Earnings Call Date:Jul 07, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 13, 2026
Earnings Call Sentiment Neutral
Balanced/Neutral. The call highlighted meaningful positives — AUM growth to $1.126B, robust deal flow and net originations, substantial liquidity ($197M), low nonaccruals (1.2% of cost), and ROE and total returns that outperform the BDC industry. However, material near‑term earnings and valuation pressures were also disclosed: adjusted NII declined significantly (‑25.1% YoY), NAV and NAV per share fell sequentially (NAV down 4.5%), the portfolio incurred $15.2M of markdowns including a full write‑off of Pepper Palace, and originations faced ~50 bps tighter spreads versus repaid assets. Management emphasizes disciplined underwriting, strong liquidity, and a path to close the dividend coverage gap, but the near‑term metrics show clear headwinds requiring monitoring.Positive Updates
Assets Under Management Growth
AUM grew 1.6% during the quarter to an almost‑record $1.126 billion, driven by originations outpacing repayments and continued long‑term AUM growth since management took over the BDC.
Negative Updates
Adjusted NII and NII Per Share Declines
Adjusted NII was $7.6 million this quarter, down 11.0% sequentially and down 25.1% year‑over‑year. Adjusted NII per share was $0.47, down 11.3% sequentially and down 28.8% year‑over‑year; adjusted NII yield fell to 7.8% from 8.4% last quarter and 10.3% last year.
Read all updates
Q1-2027 Updates
Positive
Negative
Assets Under Management Growth
AUM grew 1.6% during the quarter to an almost‑record $1.126 billion, driven by originations outpacing repayments and continued long‑term AUM growth since management took over the BDC.
Read all positive updates
Company Guidance
Management reiterated prudent, disciplined guidance to deploy $197M of available liquidity (about $61M cash, ~$46M undrawn SBA debentures and $90M of revolvers) to support continued AUM growth (AUM +1.6% q/q to $1.126B; capacity to grow assets ~17% without external financing) and ongoing originations (net +$31M in Q1 from $79.2M gross originations across 2 new platforms, 10 follow‑ons and $11M of BB/BBB CLO debt), while preserving credit quality (core non‑CLO portfolio ~0.2% below cost, total portfolio 3.6% below cost, 2 nonaccruals = 1.2% of cost vs. industry 3.7%, 81.7% first‑lien, LTV ~37%, portfolio leverage ~4.8x ex‑Pepper Palace). They affirmed the $0.25/month ($0.75/quarter) dividend (annualized ~14% on $21.42 share price) and expect adjusted NII to recover from $7.6M ($0.47/sh; adjusted NII yield 7.8%, down from $0.53/sh last quarter) as spreads show signs of widening and pipeline yields improve, citing a latest‑12‑month ROE of 4.0% (long‑term ROE 10.1%) and a long track record of selective underwriting.Saratoga Investment Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
58
Neutral
Cash Flow
33
Negative
| Breakdown | TTM | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 100.70M | 99.22M | 94.16M | 69.55M | 69.85M | 77.46M |
| Gross Profit | 56.99M | 49.92M | 42.10M | 20.36M | 36.35M | 57.58M |
| EBITDA | 46.62M | 38.09M | 31.97M | 11.70M | 26.76M | 48.52M |
| Net Income | 16.76M | 36.60M | 28.09M | 8.93M | 24.68M | 45.74M |
Balance Sheet | ||||||
| Total Assets | 1.20B | 1.14B | 1.19B | 1.19B | 1.08B | 876.24M |
| Cash, Cash Equivalents and Short-Term Investments | 60.81M | 21.79M | 148.22M | 8.69M | 65.75M | 47.26M |
| Total Debt | 590.00M | 729.86M | 781.82M | 803.67M | 711.13M | 498.88M |
| Total Liabilities | 818.97M | 744.95M | 798.88M | 820.98M | 731.20M | 520.46M |
| Stockholders Equity | 378.45M | 396.16M | 392.67M | 370.22M | 346.96M | 355.78M |
Cash Flow | ||||||
| Free Cash Flow | -146.29M | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Operating Cash Flow | -146.29M | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Investing Cash Flow | -30.74M | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financing Cash Flow | -15.20M | -94.91M | -33.32M | 101.64M | 173.58M | 226.09M |
Saratoga Investment Technical Analysis
Negative
18.94
Price Trends
20.05
Negative
20.78
Negative
20.95
Negative
Market Momentum
-0.21
Negative
40.80
Neutral
12.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAR, the sentiment is Negative. The current price of 18.94 is below the 20-day moving average (MA) of 19.14, below the 50-day MA of 20.05, and below the 200-day MA of 20.95, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 40.80 is Neutral, neither overbought nor oversold. The STOCH value of 12.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $14.10B | 14.55 | 6.78% | 10.22% | 10.38% | -34.10% | |
70 Outperform | $650.69M | 3.89 | 27.00% | 6.02% | -57.47% | 92.94% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $705.56M | -15.56 | -4.28% | 17.69% | -50.21% | -161.42% | |
60 Neutral | $237.02M | 34.77 | <0.01% | 29.18% | 138.32% | -27.91% | |
60 Neutral | $342.32M | -3.21 | -17.68% | 27.85% | -141.00% | -809.18% | |
56 Neutral | $300.87M | 18.71 | 4.19% | 15.84% | 2.09% | -59.51% |
* Financial Sector Average
SAR
Saratoga Investment
18.69
-3.38
-15.33%
GAIN
Gladstone Investment
16.18
3.04
23.14%
NMFC
New Mountain Finance
7.45
-1.53
-17.00%
PNNT
Pennantpark Investment
3.67
-2.12
-36.59%
ARCC
Ares Capital
19.67
-0.55
-2.74%
TCPC
BlackRock TCP Capital
4.08
-1.87
-31.42%
Saratoga Investment Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Saratoga Investment Refinances Notes, Extends Debt Maturities
Positive
Aug 19, 2026
On August 18, 2026, Saratoga Investment Corp. entered into an underwriting agreement for an $85 million offering of 8.00% Notes due 2031, with underwriters holding an option to buy up to an additional $12.75 million. The Company plans to list the ...
Executive/Board Changes
Saratoga Investment Expands Board, Adds Independent Director Zoellner
Positive
Aug 6, 2026
On August 5, 2026, Saratoga Investment Corp.’s board expanded from five to six members and appointed Scott E. Zoellner as an independent director with a term running through the 2027 annual shareholders’ meeting. Zoellner, who joins th...
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.