Alliance Entertainment Holding Corporation Class A Common Stock (AENT)

FairStock Score: 61/100 — STEADY

Key Financials

Strengths

• High return on equity of 20.5% demonstrating efficient capital deployment

Concerns

• Trades significantly above Graham Number ($5) with negative 54% margin of safety—limited downside protection
• Revenue declining at 6.3% year-over-year signals potential demand weakness or market share loss

AI Analysis

Alliance Entertainment Holding Corporation Class A Common Stock is a micro-cap communication services company valued at $372 million. The business generates $1.1 billion in annual revenue with a 0.9% net margin. From a quality standpoint, Alliance shows Altman Z-Score of 2.1 in the grey zone and strong 21% ROE. On valuation, the stock is reasonably priced at 16.9x earnings, with trades above its Graham Number with a negative 54% margin. Growth dynamics show revenue growing at -6.3% and profit growth of 32.8%. Our composite FairStock Score of 61/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the communication services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer