Saratoga Investment Corp Down 8.49% To $23.70 After Earnings Miss

Saratoga Investment Corp (SAR) missed earnings estimates for Q3 2024 this afternoon.

Saratoga Investment Corp's earnings came in at an EPS of $1.01 per share, 2% lower than estimates for an EPS of $1.03 per share. The firm's earnings are up 31% since reporting $0.77 per share in the same period a year ago. Remember, earnings reported were on an adjusted basis, so they may not be comparable to prior reports and/or analyst estimates.

Consensus estimates for Saratoga Investment Corp revenue averaged out to $36.1 million, with the business managing to beat those expectations with reported third-quarter revenue of $36.3 million. The $260.3 thousand (1%) positive revenue surprise led to 38% growth year-over-year as the firm reported revenue of $26.3 million in its year-ago quarter. The lower earnings growth compared to revenue points to Saratoga Investment Corp not being able to improve its profit margin.

The stock is down 8.49% to $23.70 after the report.

The firm's higher revenue growth to earnings signals that the firm has not been able to reduce costs and has seen its profit margin decrease.

Wall Street Analysts had an average rating of Buy on the stock prior to the report.

InvestorsObserver gives the stock a Bearish Sentiment score at the moment based on recent trading.

Prior to the report, InvestorsObserver gave the stock an overall score of 36. Meanwhile, the average Wall Street analyst rated the stock a Buy.

Saratoga Investment Corp is a specialty finance company, which invests primarily in leveraged loans and mezzanine debt issued by private middle-market companies in the United States. Its investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments. Its portfolio comprises investments in leveraged loans, which are generally senior debt instruments that rank ahead of subordinated debt of the portfolio company issued by middle-market companies. In addition, it also purchases the mezzanine debt, which is unsecured and subordinated to senior debt of the portfolio company and makes equity investments in middle-market companies.