Saratoga Investment Corp. (NYSE:SAR) Earnings Report Analysis

Font: Financial Modeling Prep  • Jul 09, 2025

• Saratoga Investment Corp. (NYSE:SAR) reported earnings per share (EPS) of $0.66, missing the estimated $0.69, with revenue also falling short at approximately $28 million against the expected $32.8 million.
• The company has shown resilience by exceeding consensus EPS estimates twice over the past four quarters, despite a decline in year-over-year earnings and revenue.
• SAR reported a 17.9% increase in adjusted net investment income (NII) per share and a 14.1% quarterly return on equity (ROE), outperforming the BDC industry average.

Saratoga Investment Corp. (NYSE:SAR), a business development company (BDC) that provides financing solutions to middle-market companies, disclosed its financial performance for the quarter ending July 8, 2025. The company reported earnings per share (EPS) of $0.66, slightly below the anticipated $0.69. Actual revenue was approximately $28 million, not meeting the expected $32.8 million.

The earnings report indicated a negative surprise of 4.35%, as highlighted by Zacks, marking a decrease from the $1.05 per share earnings reported in the same quarter the previous year. In the preceding quarter, SAR was projected to earn $0.77 per share but reported $0.56, resulting in a significant negative surprise of 27.27%. Despite these challenges, SAR has managed to exceed consensus EPS estimates twice over the past four quarters.

For the quarter ending May 2025, SAR's revenue was $32.32 million, 1.36% below the Zacks Consensus Estimate, and a decrease from the $38.68 million in revenues reported a year ago. However, SAR has surpassed consensus revenue estimates twice in the last four quarters, indicating some resilience in its financial performance.

The company reported a 17.9% increase in adjusted net investment income (NII) per share and a 0.9% increase in net asset value (NAV) from the previous quarter. The quarterly return on equity (ROE) was 14.1%, contributing to a last twelve months (LTM) ROE of 9.3%, which surpasses the BDC industry average of 7.0%. This demonstrates SAR's ability to generate returns for its shareholders.

SAR's financial metrics include a price-to-earnings (P/E) ratio of approximately 12.40 and a price-to-sales ratio of about 4.09. The enterprise value to sales ratio is significantly high at 6,188.67, suggesting a substantial market valuation relative to its sales. The company's debt-to-equity ratio is 1.86, highlighting its financial leverage, while the current ratio is 0.28, which may suggest potential liquidity challenges in meeting short-term obligations.