Saratoga Investment (NYSE: SAR) has confirmed that it will release its fiscal Q3 2022 results on Wednesday, January 5, 2022, after market close.
What to look for
Earnings: Stockearning’s estimated EPS for fiscal Q3 2022 is expected to be $0.55. In the same quarter a year ago, the company posted an earnings surprise of 4.17% with an EPS of $0.5. in the fiscal Q2 2022, the company produced an earnings surprise of 18.87%, beating estimates to post EPS of $0.63. Historical EPS Performance for the past 12 quarters indicates that the company has beat estimates eleven times (91%) and missed once (8%).
Revenue: In the second quarter, the company's assets under management were $666.1 million reflecting a 31.1% increase from a year ago and a decrease of 1.7% from the previous quarter. Saratoga Investment has revenue of $18.44 million, missing analysts' expectations of $16.67 million in Q2 2022.
Stock Movement: SAR shares have gained 0.2% since the last earnings release. SAR shares have been UP 16 times out of the past 30 quarters following the earnings release. So, the historical price reaction indicates a 53% probability of the share price going up once SAR reports its fiscal Q3 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 4%.
What analysts are saying
B. Riley analyst Sarkis Sherbetchyan reiterated a Buy rating on the stock but raised the firm’s target price from $30 to $31 post Q2 earnings beat. According to the analyst, the company continues to grow its portfolio, and its management is expected to increase the quarterly dividend.
Maxim analyst Michael Diana raised his price target on the stock from $29 to $31 but maintained a “Buy” rating on the shares. The analyst noted that the company’s dividend of $0.44 is covered by its adjusted net interest earnings of $0.56 per share in Q1. Michael added that the new price target on SAR reflects a 1.08 times net asset value multiple, in line with "high-quality BDC peers."
Oppenheimer analyst Mitchel Penn commenced coverage on Saratoga Investment with a "Buy" rating and a price target of $29. The analyst predicts that the company "can earn a 10.6% return on equity" and estimated a fair value of the stock of $29 per share or 1.1 times book value.
Also, Raymond James analyst Robert Dodd commenced coverage in the stock with a "Buy" rating and a price target of $30. The analyst believes that the company will continue increasing its dividend modesty at current levels with projected over-earning accreting to net asset value per share and told investors in a note that at current levels, the risk/return is attractive.
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