Kustom Entertainment Inc. Common Stock (KUST)

FairStock Score: 52/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

In the Graham-Buffett tradition, I begin with durable earnings and a balance sheet that can survive mistakes. Kustom Entertainment fails that first test. It has reported losses in each of the last four years, and the FairStock Lynch category is none for that exact reason. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $5.4M and net income was -$4.5M, a -84.49% margin. Revenue did rise from $2.9M in fiscal Q2 2025, so there is some top-line momentum, but the loss was the same $4.5M, meaning growth has not cured the economics. Full-year fiscal 2025 revenue was $13.8M with a $6.7M net loss; fiscal 2024 was $13.5M revenue and a $19.8M loss; fiscal 2023 was $28.2M revenue and a $25.5M loss. That is not a stable growth curve; it is a business that has shrunk from its fiscal 2023 revenue base while still losing money. Free cash flow is -$3.7M trailing, which against a $2.2M market cap gives a -173.2% FCF yield. The FairStock-calculated Piotroski F-Score is 3/9 and Altman Z-Score is -12.42, signs of financial distress. The stock closed at $3.97 on 2026-10-13, with FairStock-calculated P/B of 4.96 and P/E of -0.04. A 52-week range of $0.58 to $30.60 tells me the market is pricing speculation, not a margin of safety. There is no visible moat in a 30-employee niche hardware and entertainment mix. Unless revenue growth translates into positive cash flow and a repaired balance sheet, I see no Graham-style bargain.

In plain English: Kustom Entertainment makes digital video and safety products for law enforcement, security, and commercial customers, and it also has an entertainment segment. The business looks weak: it has lost money in each of the last four years, and in the latest quarter it lost $4.5 million on $5.4 million of revenue. At $3.97 a share with a $2.2 million market value, the price looks speculative rather than clearly cheap because the company still has no profits and is burning cash.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer