MeritValue

SARATOGA INVESTMENT CORP.

SARdata completeness 75%6 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'capex'; no data for concept 'interestExpense'; no data for concept 'pretaxIncome'

The thesis, from the filings

SARATOGA INVESTMENT CORP. earns about 8% on equity, but has diluted owners by 38% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $18.36 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue—————
Net income$45.7M1$24.7M2$8.93M3$28.1M3$36.6M3
Operating cash flow−$203.1M4−$130.4M5−$157.2M6$197.5M6−$88M6
Capital expenditure—————
Free cash flow (derived)—————
Total debt—$728.4M7—$793.9M8$739.4M9
Cash & equivalents$47.3M10$65.7M11$8.69M12$148.2M12$1.68M12
Diluted shares11.5M12.0M12.7M13.9M15.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$249.94
your share of equity
Profit it earned you last year
$23.09
Free cash flow it threw off
—
Debt you’d be carrying
$466.47

10 shares is a claim on $249.94 of net worth that earned you $23.09 last year, against $466.47 of debt.

iii. Is this a good business?
Moat signal · return on equity
8% avg · 5y
FY22 13%FY23 7%FY24 2%FY25 7%FY26 9%

It earned an average 8% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+38% shares · 5y

Share count is up 38% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$18.36
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$28.1M
  • growthAssumed0.0%
Graham Number
$36.04
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-02-28 · accession 0001213900-24-040080 (NetIncomeLoss)
  2. 10-K · period ending 2023-02-28 · accession 0001213900-25-040617 (NetIncomeLoss)
  3. 10-K · period ending 2024-02-29 · accession 0001213900-26-052176 (NetIncomeLoss)
  4. 10-K · period ending 2022-02-28 · accession 0001213900-24-040080 (NetCashProvidedByUsedInOperatingActivities)
  5. 10-K · period ending 2023-02-28 · accession 0001213900-25-040617 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2024-02-29 · accession 0001213900-26-052176 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2023-02-28 · accession 0001213900-23-035521 (LongTermDebt)
  8. 10-K · period ending 2025-02-28 · accession 0001213900-25-040617 (LongTermDebt)
  9. 10-K · period ending 2026-02-28 · accession 0001213900-26-052176 (LongTermDebt)
  10. 10-K · period ending 2022-02-28 · accession 0001213900-24-040080 (CashAndCashEquivalentsAtCarryingValue)
  11. 10-K · period ending 2023-02-28 · accession 0001213900-25-040617 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2024-02-29 · accession 0001213900-26-052176 (CashAndCashEquivalentsAtCarryingValue)