The Q2 miss was driven by company-specific credit markdowns, not broad portfolio deterioration, but the negative LTM ROE and declining NAV trend are concerning. Watch the Q3 call for updates on the three stressed credits (Madison Logic, Exigo, Chronus) and whether the CLO refinancing and higher SOFR rates begin to lift NII. The dividend yield at 18.1% suggests the market is pricing in a cut risk.
Price Chart
Executive Summary
Saratoga Investment Corp. reported fiscal Q2 2027 GAAP EPS of -$0.41, a significant miss vs the $0.49 consensus, driven by $14.4M in portfolio markdowns concentrated in three credits (Madison Logic, Exigo, Chronus). Adjusted NII of $0.46 per share was slightly below the $0.47 consensus and down from $0.58 a year ago, reflecting higher interest expense from refinancing. NAV per share fell 4.6% sequentially to $22.15, with the LTM ROE turning negative at -1.1% vs 9.1% a year ago, signaling continued credit pressure.
Key Financial Metrics
Key Facts
- GAAP EPS of -$0.41 vs consensus $0.49 (-183.7% miss)
- Adjusted NII per share of $0.46 vs consensus $0.47 (-2.1% miss)
- NAV per share fell 4.6% QoQ to $22.15 from $23.23
- LTM ROE turned negative to -1.1% from 9.1% a year ago
- Portfolio marked down $14.4M, with $13.1M in three specific credits (Madison Logic, Exigo, Chronus)
- AUM grew 2.1% QoQ to $1.150B with $37.1M net originations
- Repurchased 444,124 shares at avg $18.91, generating $0.09 NAV accretion
- Issued $85M SAX baby bond (8.00% due 2031) to refinance $105.5M SAT bond
- Non-accruals at 0.0% of fair value and 1.3% of cost; both non-accrual positions sold post-quarter-end
- Dividend maintained at $0.75/quarter ($0.25/month), representing 18.1% yield on Oct 5 price of $16.61
Financial Impact
NAV declined $25.9M (-6.8%) QoQ; adjusted NII fell 20.7% YoY to $7.4M; portfolio depreciation of $14.4M
Risk Factors
- Further credit deterioration in the three marked-down portfolio companies could pressure NAV
- Higher interest expense from refinancing (8.00% SAX bonds) may continue to compress NII if asset spreads don't widen
- Negative LTM ROE (-1.1%) vs industry average (2.2%) signals underperformance
- Dividend yield of 18.1% implies market expectation of a potential dividend reduction
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001213900-26-107199 |
| Document: ea0307793-8k_saratoga.htm | 0001213900-26-107199 |
| Document: 0001213900-26-107199-index-headers.html | 0001213900-26-107199 |
| Document: 0001213900-26-107199-index.html | 0001213900-26-107199 |
| Document: 0001213900-26-107199.txt | 0001213900-26-107199 |
| 8-K Data (Synthetic) | 0001213900-26-107199 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 13d ago | Insider Buy | $15.07 $14.92 | ▼ −1.00% | ▲ +0.09% | $13.34 (−11.47%) |
Oct 9, 2026 16d ago | 8-K | $14.93 $15.07 | ▲ +0.94% | ▲ +0.95% | $13.34 (−10.64%) |
Oct 6, 2026 19d ago | 8-K | $14.91 $14.97 | ▼ −0.40% | ▼ −0.83% | $13.34 (+10.52%) |
Sep 23, 2026 4w ago | Press Release | $17.33 $17.11 | ▲ +1.27% | ▲ +1.81% | $13.34 (+23.02%) |
Sep 22, 2026 4w ago | Press Release | $17.46 $17.33 | ▼ −0.74% | ▼ −0.66% | $13.34 (−23.59%) |
Sep 18, 2026 5w ago | Press Release | $17.57 $17.75 | ▲ +1.02% | ▲ +1.04% | $13.34 (−24.07%) |
Sep 18, 2026 5w ago | 25-NSE | $17.64 $17.57 | ▼ −0.40% | ▼ −1.95% | $13.34 (−24.37%) |
Sep 17, 2026 5w ago | Press Release | $17.86 | awaiting T+1 | — | $13.34 (−25.30%) |
Aug 26, 2026 8w ago | 8-K | $18.42 $18.33 | ▼ −0.49% | ▼ −1.14% | $13.34 (−27.57%) |
Aug 19, 2026 9w ago | 8-K | $18.72 $18.43 | ▼ −1.55% | ▼ −1.96% | $13.34 (−28.74%) |
US Market Status
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