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Saratoga Investment
(NYSE:SAR)
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Rating:47Neutral
Price Target:
$14.50
â–¼(-21.28% Downside)
Action:Reiterated
Date:10/10/26
The score is primarily constrained by weak cash-flow quality and elevated leverage, alongside bearish technicals with the stock trading well below key moving averages. A very high dividend yield and constructive refinancing/liquidity updates from the earnings call provide partial support, but NAV pressure, credit marks, and reduced earnings/dividend coverage limit upside.
Positive Factors
Growing assets and investment pipeline
Record assets under management and positive net originations show continued capacity to deploy capital into middle-market opportunities. A growing portfolio can support recurring interest and fee income over the next several quarters if Saratoga maintains underwriting quality and investment performance.
Negative Factors
Elevated leverage and inconsistent cash generation
Persistent leverage reduces financial flexibility and increases the sensitivity of shareholder outcomes to credit losses or weaker portfolio income. Frequent negative operating and free cash flow also indicate that internal cash conversion may not consistently fund obligations and investment activity.
Read all positive and negative factors
Positive Factors
Negative Factors
Growing assets and investment pipeline
Record assets under management and positive net originations show continued capacity to deploy capital into middle-market opportunities. A growing portfolio can support recurring interest and fee income over the next several quarters if Saratoga maintains underwriting quality and investment performance.
Read all positive factors
Saratoga Investment (SAR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$233.86M
Dividend Yield21.62%
Average Volume (3M)165.85K
Price to Earnings (P/E)―
Beta (1Y)0.64
Revenue Growth-10.96%
EPS Growth-110.82%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-0.25
Shares Outstanding15,559,638
10 Day Avg. Volume216,907
30 Day Avg. Volume165,849
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 Cap4.66
Enterprise Value/Revenue10.26
Enterprise Value/Gross Profit16.36
Enterprise Value/Ebitda26.71
Forecast
1Y Price Target
$20.67Price Target Upside12.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 makes money primarily from investment income generated by its portfolio of loans and related investments in middle-market companies. Its core revenue stream is interest income earned on debt investments (such as first-lien/seco...
Saratoga Investment Earnings Call Summary
Earnings Call Date:Oct 06, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Jan 12, 2027
Earnings Call Sentiment Neutral
The call was mixed. Saratoga highlighted record AUM, positive originations, substantial liquidity, refinancing accomplishments, resolution of nonaccruals and strong long-term investment performance. However, current-period results were pressured by NAV declines, credit markdowns, lower adjusted NII, negative recent ROE and total return, tight spreads and higher financing costs. Management remained confident in its balance sheet, underwriting discipline and pipeline, but acknowledged a challenging and uncertain operating environment.Positive Updates
Record Assets Under Management and Positive Net Originations
Net positive originations were $37.1 million during the quarter, including 2 new non-software portfolio companies. Assets under management grew 2.1% during the quarter to a record $1.15 billion.
Negative Updates
NAV Decline During the Quarter and Year
Quarter-end NAV was $6 million, down 6.8% from $378.5 million in the prior quarter and down 14.1% from $410.5 million a year earlier. NAV per share declined to $22.15 from $23.23 in the prior quarter and $25.61 a year earlier.
Read all updates
Q2-2027 Updates
Positive
Negative
Record Assets Under Management and Positive Net Originations
Net positive originations were $37.1 million during the quarter, including 2 new non-software portfolio companies. Assets under management grew 2.1% during the quarter to a record $1.15 billion.
Read all positive updates
Company Guidance
Saratoga declared a monthly base dividend of $0.25 per share, or $0.75 per share in aggregate, for the quarter ended November 30, 2026, and said the Board will evaluate the dividend level on at least a quarterly basis; spillover was down to about $1 per share as of 8/31, and management said earnings are in the process of being ready to increase. Following the CLO refinancing, management expects around $450,000 on a quarterly basis in management fees, plus interest income, while the extended reinvestment period is expected to support future BDC management fees and interest income. The company expects a substantial shift away from the software in its deal flow and ultimately within its portfolio, said 85% to 90% of deals are SBIC eligible, and indicated incremental deal flow will generally go to the SBIC because it is the cheapest form of capital.Saratoga Investment Financial Statement Overview
Summary
Income Statement
55
Neutral
Balance Sheet
48
Neutral
Cash Flow
32
Negative
| Breakdown | TTM | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 106.17M | 99.22M | 94.16M | 69.55M | 69.85M | 77.46M |
| Gross Profit | 66.59M | 49.92M | 42.10M | 20.36M | 36.35M | 57.58M |
| EBITDA | 40.78M | 38.09M | 31.97M | 11.70M | 26.76M | 48.52M |
| Net Income | -3.19M | 36.60M | 28.09M | 8.93M | 24.68M | 45.74M |
Balance Sheet | ||||||
| Total Assets | 1.26T | 1.14B | 1.19B | 1.19B | 1.08B | 876.24M |
| Cash, Cash Equivalents and Short-Term Investments | 80.09B | 21.79M | 148.22M | 8.69M | 65.75M | 47.26M |
| Total Debt | 817.38B | 729.86M | 781.82M | 803.67M | 711.13M | 498.88M |
| Total Liabilities | 903.69B | 744.95M | 798.88M | 820.98M | 731.20M | 520.46M |
| Stockholders Equity | 352.58B | 396.16M | 392.67M | 370.22M | 346.96M | 355.78M |
Cash Flow | ||||||
| Free Cash Flow | -27.89B | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Operating Cash Flow | -27.89B | -88.03M | 197.54M | -157.21M | -130.37M | -203.13M |
| Investing Cash Flow | -37.10B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financing Cash Flow | 51.81M | -94.91M | -33.32M | 101.64M | 173.58M | 226.09M |
Saratoga Investment Technical Analysis
Negative
18.42
Price Trends
17.52
Negative
18.80
Negative
19.85
Negative
Market Momentum
-0.65
Positive
23.69
Positive
33.73
Neutral
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 18.42 is above the 20-day moving average (MA) of 16.60, above the 50-day MA of 17.52, and below the 200-day MA of 19.85, indicating a bearish trend. The MACD of -0.65 indicates Positive momentum. The RSI at 23.69 is Positive, neither overbought nor oversold. The STOCH value of 33.73 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $13.33B | 13.75 | 6.78% | 10.34% | 10.38% | -34.10% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $607.29M | 3.65 | 27.00% | 6.30% | -57.47% | 92.94% | |
62 Neutral | $635.66M | -14.02 | -4.28% | 16.94% | -50.21% | -161.42% | |
60 Neutral | $207.64M | 20.14 | <0.01% | 30.19% | 138.32% | -27.91% | |
60 Neutral | $336.45M | -3.16 | -17.68% | 18.95% | -141.00% | -809.18% | |
47 Neutral | $233.86M | -60.12 | >-0.01% | 21.62% | -10.96% | -110.82% |
* Financial Sector Average
SAR
Saratoga Investment
15.03
-3.78
-20.10%
GAIN
Gladstone Investment
15.25
2.45
19.13%
NMFC
New Mountain Finance
6.73
-1.31
-16.35%
PNNT
Pennantpark Investment
3.18
-2.14
-40.21%
ARCC
Ares Capital
18.56
0.92
5.25%
TCPC
BlackRock TCP Capital
4.01
-0.73
-15.37%
Saratoga Investment Corporate Events
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and Financing
Saratoga Investment Expands Valley Credit Facility Borrowing Capacity
Positive
Oct 9, 2026
On October 8, 2026, Saratoga Investment Corp. and its subsidiary Saratoga Investment Funding II LLC amended their credit and security agreement tied to the Valley Credit Facility, expanding available borrowings from $85 million to $110 million and...
Business Operations and StrategyPrivate Placements and Financing
Saratoga Investment Expands 2031 Notes, Refinances Debt
Positive
Sep 24, 2026
On September 23, 2026, Saratoga Investment Corp. agreed with underwriters led by Lucid Capital Markets to issue and sell an additional $23.1 million of its 8.00% Notes due 2031, listed on the NYSE under ticker SAX. These new notes, which closed on...
Executive/Board ChangesShareholder Meetings
Saratoga Investment shareholders back directors and auditor
Positive
Sep 23, 2026
On September 22, 2026, Saratoga Investment Corp. held its 2026 Annual Meeting of Stockholders, with 11,352,552 of 16,080,916 eligible shares represented in person or by proxy. Stockholders elected directors G. Cabell Williams and Henri J. Steenkam...
Business Operations and StrategyPrivate Placements and Financing
Saratoga Investment Completes $85 Million Notes Offering
Positive
Aug 26, 2026
On August 26, 2026, Saratoga Investment Corp. closed an $85 million public offering of 8.00% unsecured notes due 2031, issued under a supplemental indenture with U.S. Bank Trust Company. The notes, which pay quarterly interest beginning November 3...
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.