Saratoga Investment Corp. Reports Q1 Net Loss Driven by Significant Unrealized Depreciation
SAR is trading near its 52-week low of $20.78 (0.7% above the low) on elevated volume (2.4× avg).
Summary
Saratoga Investment Corp. reported a net loss from operations and a decline in NAV per share for the quarter, primarily due to significant unrealized depreciation in its investment portfolio.
Key Events · Earnings and Guidance · SAR
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Swing to Net Loss from Operations
The company reported a net decrease in net assets from operations of $6.9 million for the quarter ended May 31, 2026, compared to a net increase of $13.9 million in the same period last year.
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Significant Unrealized Depreciation
Net change in unrealized appreciation (depreciation) on investments swung from a gain of $0.9 million in Q1 2025 to a depreciation of $15.2 million in Q1 2026, significantly impacting net assets.
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NAV Per Share Decline
Net Asset Value (NAV) per share decreased to $23.23 as of May 31, 2026, from $24.42 at February 28, 2026.
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Increased Debt and Interest Expenses
Interest and debt financing expenses increased by $1.2 million, or 9.6%, due to higher average outstanding debt and an increased weighted average interest rate. The company issued $25 million in 7.25% Notes due 2029 and increased SBA debentures from $160 million to $213 million.
Analysis · SAR · Unknown
Saratoga Investment Corp. reported a net decrease in net assets from operations of $6.9 million for the quarter, a significant reversal from a $13.9 million increase in the prior year. This decline was primarily driven by $15.2 million in net unrealized depreciation on investments, indicating a notable decrease in the fair value of its portfolio holdings. The company's Net Asset Value (NAV) per share also decreased from $24.42 to $23.23. While total investment income saw a slight decrease, interest and debt financing expenses increased, contributing to the overall net loss. The company did issue $25 million in new 7.25% Notes due 2029 and increased its SBA debentures, adding to its leverage, though liquidity remains adequate with increased cash and available credit lines.
At the time of this filing, SAR was trading at $20.93 on NYSE in the Unknown sector, with a market capitalization of approximately $340.5M. The 52-week trading range was $20.78 to $25.64. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.