Saratoga Investment Corp. (SAR) Post Earning Analysis
Saratoga Investment Corp. is a business development company focusing on a range of financing activities for the lower end of middle market companies. Specializing in leveraged buyouts, acquisition financings, and other transitional financing, the firm invests mainly in the U.S. across diverse sectors such as aerospace, healthcare, technology, and more. Saratoga structures its investments across both debt and equity, aiming to take majority stakes in companies with revenues between $5 million and $250 million.
This section provides an overview of available data.
The current price of the asset at $22.93 represents a 1.28% decline today, indicating a bearish movement in the short term. This price is near the lower end of the weekly range ($22.73 – $24.38), slightly above the week’s low by 0.9%, suggesting some resistance around this level.
The asset is significantly below both its 20-day and 50-day moving averages by 4.83% and 5.96% respectively, highlighting a negative short to medium-term trend. However, the proximity to the 200-day moving average, being only 1.5% below, indicates that the longer-term trend might be more stable.
The Relative Strength Index (RSI) at 29.92 suggests that the asset is currently in the oversold territory, which could indicate a potential rebound or stabilization if buyers step in. However, the Moving Average Convergence Divergence (MACD) at -0.24 points to ongoing bearish momentum.
Considering the 52-week range, the price has rebounded 15.48% from its low but remains 8.73% below the high, reflecting a recovery yet underperformance over a longer period. The year-to-date metrics mirror the 52-week data, emphasizing a consistent trend throughout the year.
Overall, the asset is facing downward pressure in the short to medium term with potential stabilization signs due to its oversold status and proximity to significant moving averages.
Price Chart
Saratoga Investment Corp. (NYSE: SAR) reported its fiscal Q2 2026 results with a mixed financial performance. The company’s Assets Under Management (AUM) stood at $995.3 million as of August 31, 2025, marking a 4.4% decrease year-over-year but a 2.8% increase from the previous quarter. Net Asset Value (NAV) increased significantly to $410.5 million, up 10.3% year-over-year. However, the NAV per share saw a decline of 5.4% from the previous year to $25.61.
Total Investment Income for the quarter was $30.6 million, reflecting a substantial decrease of 28.8% from the previous year. Both Net Investment Income (NII) and Earnings per Share (EPS) experienced declines, with NII per share at $0.58, down 50.1% year-over-year, and EPS at $0.84, down 13.4% from the previous year.
Despite these declines, the company declared a stable quarterly dividend of $0.75 per share, slightly up by 1.4% from last year. Investment activities remained robust with $52.2 million in new originations, significantly higher than the previous year. The company’s cash position decreased to $200.8 million from $224.3 million in the prior quarter, and it maintained a low non-accrual investment rate, indicating strong portfolio health amidst economic uncertainties.
Earnings Trend Table
| Date | Estimate EPS | Reported EPS | Surprise % | |
|---|---|---|---|---|
| 0 | 2025-10-07 | 0.67 | 0.58 | -13.43 |
| 1 | 2025-05-07 | 0.70 | -0.05 | -107.17 |
| 2 | 2025-01-08 | 0.94 | 0.64 | -32.06 |
| 3 | 2024-10-08 | 0.94 | 0.97 | 2.97 |
| 4 | 2024-05-06 | 0.95 | 0.39 | -59.06 |
| 5 | 2024-01-09 | 1.03 | -0.31 | -130.12 |
| 6 | 2023-10-09 | 1.08 | 0.65 | -39.69 |
| 7 | 2023-07-10 | 0.85 | -0.02 | -102.35 |
The analysis of the EPS trends over the last eight quarters reveals significant volatility and frequent underperformance relative to expectations. A pattern of inconsistency is evident, with four quarters showing negative surprises where the reported EPS fell short of the estimates significantly. The most drastic underperformances were observed in Q1 2024 and Q2 2025, with surprises of -130.12% and -107.17% respectively, indicating substantial misses against analyst expectations.
Conversely, there was a rare instance of outperformance in Q4 2024, where the reported EPS exceeded estimates by 2.97%. This suggests that while the company can occasionally surpass expectations, it struggles with stability and predictability in its earnings.
The trend of reported EPS also indicates a concerning pattern, with two instances of negative earnings reported, which is highly unusual and indicative of underlying operational or market challenges. The fluctuations between negative and positive EPS, alongside significant deviations from estimates, point towards potential volatility in the company’s financial performance and possibly its operational environment.
Overall, the data suggests a need for cautious analysis of the company’s financial health and operational efficiency, as the frequent and substantial deviations from expected EPS could concern investors looking for stability and predictability in returns.
Dividend Payments Table
| Date | Dividend |
|---|---|
| 2025-10-07 | 0.25 |
| 2025-09-04 | 0.25 |
| 2025-08-06 | 0.25 |
| 2025-07-08 | 0.25 |
| 2025-06-05 | 0.25 |
| 2025-05-06 | 0.25 |
| 2025-04-08 | 0.25 |
| 2025-03-06 | 0.74 |
The dividend data spanning from March 2025 to October 2025 indicates a notable trend in the company’s dividend distribution strategy. Initially, in March 2025, the dividend was significantly higher at $0.74. However, starting from April 2025, there was a marked reduction to $0.25, which then remained consistent across the subsequent months up to October 2025.
This shift suggests a strategic adjustment in the company’s dividend policy, potentially reflecting changes in cash flow management, earnings stability, or a revised approach to shareholder returns. The consistency of the $0.25 dividend from April to October might indicate a new established level aimed at maintaining regular, predictable returns to shareholders while possibly allocating more resources to other areas such as investment or debt reduction.
Investors and analysts should monitor further announcements or financial statements from the company for insights into the reasons behind the March dividend’s anomaly and the rationale for the apparent stabilization at a lower rate thereafter.
The most recent rating changes for the stock in question present a mixed sentiment from various financial analysis firms, reflecting differing outlooks on the company’s future performance.
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Compass Point (June 9, 2025) – Downgrade from Buy to Neutral with a target price of $24.25: This recent downgrade by Compass Point indicates a shift in their outlook from a strong positive bias to a more cautious stance. The target price of $24.25, while slightly above the previous target by another firm, suggests that Compass Point sees limited upside potential from current levels, prompting a neutral recommendation.
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B. Riley Securities (May 13, 2025) – Resumed Coverage with Neutral rating and a target price of $23.50: B. Riley Securities resumed coverage on the stock with a neutral rating, setting a target price slightly lower than Compass Point’s subsequent downgrade. This indicates a cautious perspective on the stock’s growth prospects or stability, aligning closely with the market’s uncertainties.
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Ladenburg Thalmann (October 10, 2024) – Downgrade from Buy to Neutral: Ladenburg Thalmann’s downgrade to neutral from buy, without a specified target price, reflects a reevaluation of the stock’s earlier perceived potential. The absence of a target price could suggest uncertainty about the stock’s valuation, indicating a more reserved outlook.
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Compass Point (July 11, 2024) – Upgrade from Neutral to Buy with a target price of $24.75: This upgrade represents a more optimistic view at that time, with Compass Point setting a target price that indicates a belief in potential growth above the then-current trading levels. The target price of $24.75 also suggests confidence in the company’s ability to outperform market expectations or its sector.
Overall, these rating changes highlight a trajectory from optimism to a more tempered view of the stock’s future performance, with recent analyses leaning towards neutrality, reflecting possible concerns about growth sustainability or market conditions affecting the stock.
As of the most recent data, the current price of the stock is $22.93. This price is slightly below the average target price provided by various analysts. For instance, Compass Point recently downgraded the stock from “Buy” to “Neutral,” setting a target price at $24.25. Similarly, B. Riley Securities resumed coverage with a “Neutral” rating, placing a target price of $23.50. Earlier, Compass Point had upgraded the stock from “Neutral” to “Buy” with a target price of $24.75, suggesting an earlier positive outlook.
The shifts in ratings and target prices indicate a general consensus that the stock might have limited upside potential from its current price, hovering around a modest increase as suggested by the target prices ranging from $23.50 to $24.75. This series of evaluations suggests a cautious but not pessimistic perspective from analysts regarding the stock’s future price movement.
Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice, investment recommendations, or trading guidance. Markets involve risk, and past performance is not indicative of future results. You should always conduct your own research and consult with a qualified financial advisor before making any investment decisions. By acting, you accept full responsibility for your choices.
