Saratoga Investment Corp. (SAR) Q1 2027 Financial Results Summary
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Saratoga Investment Corp. (SAR) Q1 2027: Mixed Results Amid Market Challenges — Cautiously Optimistic
Saratoga Investment Corp. (NYSE: SAR) reported its fiscal first quarter 2027 results, revealing a decrease in net asset value (NAV) of $17.9 million or -4.5% YoY, with NAV per share dropping to $23.23 from $25.52 a year ago. This decline reflects ongoing challenges in the private credit sector, but the company managed to grow its assets under management (AUM) by 1.6% to $1.126 billion.
Despite the NAV decline, the quarter's performance presents a mixed bag for shareholders. While the company continues to face headwinds, its ability to maintain a dividend of $0.75 per share and achieve net originations of $31 million indicates resilience in a tough market environment.
Key Financial Metrics:
- Assets Under Management (AUM): $1.126 billion, up 1.6% from $1.109 billion in the previous quarter and up 16.3% from $968.3 million YoY.
- Net Asset Value (NAV): $378.5 million, down 4.5% YoY from $396.4 million.
- NAV per Share: $23.23, down 9.5% from $25.52 YoY.
- Total Investment Income: $30.8 million, down 4.8% YoY from $32.3 million.
- Net Investment Income (NII): $7.6 million, down 25.1% YoY from $10.1 million.
- Adjusted NII per Share: $0.47, down from $0.66 YoY.
- Earnings per Share (EPS): $(0.42), down from $(0.16) in the previous quarter.
- Return on Equity (ROE): 4.0% for the last twelve months, down from 9.3% YoY.
Analyst Opinion
This quarter presents a disappointing outcome for shareholders primarily due to the significant drop in NAV and the negative EPS. The decline in NII and adjusted NII per share reflects the impact of lower interest rates and tighter spreads on the company’s floating-rate asset base. However, the company’s ability to maintain its dividend and achieve net originations suggests a commitment to shareholder returns and growth, which is a positive sign in a challenging environment.
Dividend and Share Buyback
Saratoga Investment declared a base quarterly dividend of $0.75 per share, consistent with the previous quarter and last year. This dividend reflects a 14.0% yield based on the stock price of $21.42 as of July 6, 2026. The company also has a share repurchase plan in place, having purchased 1,037,698 shares at an average price of $22.05 for approximately $22.9 million. However, no shares were repurchased during the quarter.
Forward Catalysts
Investors should closely monitor the company’s performance in the upcoming quarters, particularly regarding its ability to navigate the current macroeconomic challenges, including geopolitical tensions and inflationary pressures. Key areas to watch include:
- Continued asset growth and net originations, which are crucial for maintaining AUM and income levels.
- Market conditions affecting credit quality and portfolio valuations, especially given the recent markdowns in the non-CLO core portfolio.
- Interest rate movements and their impact on the company’s floating-rate assets, which could influence NII and overall profitability.
In conclusion, while Saratoga Investment faced significant challenges this quarter, its commitment to dividends and strategic growth initiatives provide a cautiously optimistic outlook for shareholders. Investors should remain vigilant about market conditions and the company's ability to adapt to ongoing economic pressures.
Below are the extracted tables from the press release:
Note: All amounts are in thousands.
| For the three months ended May 31, 2026 | For the three months ended May 31, 2025 |
|---|---|
| $26,005,778 | $25,464,663 |
| $726,094 | $595,624 |
| $686,716 | $1,190,661 |
| $173,291 | $168,229 |
| $503,610 | $584,749 |
| $19,586 | $- |
| $28,115,075 | $28,003,926 |
| $554,386 | $2,027,211 |
| $544,988 | $705,175 |
| $- | $562,183 |
| $778,852 | $436,418 |
| $778,852 | $998,601 |
| $656,363 | $264,375 |
| $127,261 | $319,329 |
| $30,776,925 | $32,318,617 |
| $13,650,283 | $12,451,865 |
| $4,970,053 | $4,333,332 |
| $1,892,061 | $2,536,513 |
| $531,236 | $699,200 |
| $1,350,000 | $1,250,000 |
| $80,598 | $74,310 |
| $126,000 | $131,500 |
| $600,266 | $645,411 |
| $(-16,559) | $54,454 |
| $23,183,938 | $22,176,585 |
| $7,592,987 | $10,142,032 |
| $(-488,148) | $2,262,984 |
| $638,355 | $638,355 |
| $150,207 | $2,901,339 |
| $(-11,927,184) | $372,148 |
| $(-2,418,612) | $(-45,944) |
| $(-831,335) | $617,773 |
| $(-15,177,131) | $943,977 |
| $530,824 | $(-55,085) |
| $(-14,496,100) | $3,790,231 |
| $(-6,903,113) | $13,932,263 |
| $(-0.42) | $0.91 |
| 16,252,548 | 15,344,510 |
| May 31, 2026 | February 28, 2026 |
|---|---|
| $1,034,744,952 | $1,016,247,566 |
| $50,325,404 | $52,710,911 |
| $41,263,586 | $40,175,335 |
| $1,126,333,942 | $1,109,133,812 |
| $46,140,915 | $1,680,070 |
| $14,667,902 | $20,105,683 |
| $9,048,860 | $7,314,053 |
| $232,837 | $249,720 |
| $999,726 | $781,766 |
| $1,197,424,182 | $1,139,265,104 |
| $70,000,000 |
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