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1. Company Snapshot

1.a. Company Description

Alliance Entertainment Holding Corporation operates as a wholesaler, distributor, and e-commerce provider for the entertainment industry worldwide.It offers vinyl records, video games, digital video discs, blu-rays, toys, compact discs, collectibles, and other entertainment and consumer products.The company also provides third party logistics products and services.


It distributes its physical media, entertainment products, hardware, and accessories through multi-channel strategy.The company was founded in 1990 and is headquartered in Plantation, Florida.

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1.b. Last Insights on AENT

Here is a 90-word analysis of the negative drivers behind Alliance Entertainment Holding Corporation's recent stock performance: Alliance Entertainment Holding Corporation's recent earnings release revealed reduced revolver debt by 31%, but also highlighted higher-margin Direct to Consumer sales reaching 42% of gross revenue. However, the company's strategic investments and partnerships may have weighed on its short-term performance. The launch of new Handmade by Robots collectible figures at Walmart may not have been enough to offset potential concerns over the company's ability to maintain profitability in the face of increased investments.

1.c. Company Highlights

2. Alliance Entertainment's Q1 FY2026 Earnings: A Strong Start to the Year

Alliance Entertainment's fiscal 2026 first-quarter revenue grew 11% year-over-year to $254 million, driven by solid demand across physical media, collectibles, and direct-to-consumer channels. Adjusted EBITDA increased to $12.2 million from $3.4 million, a 259% improvement, while gross margin expanded 340 basis points to 14.6%. Earnings per share rose to $0.10, compared to $0.01 in the prior year period, beating analyst estimates of $0.08. The company's strong financial performance was underpinned by its omnichannel distribution network, which serves approximately 175 online retailers and more than 35,000 physical stores.

Publication Date: Nov -25

📋 Highlights
  • Revenue and Profit Surge: Q1 FY2026 revenue rose 11% to $254M, with adjusted EBITDA surging 259% to $12.2M.
  • Gross Margin Expansion: Margins widened 340 bps to 14.6%, driven by automation and AI efficiency gains.
  • Debt Refinancing: New $120M credit facility reduced borrowing costs by 250 bps, saving ~$1.5M annually.
  • Collectibles Growth: Handmade by Robots, acquired in Q4, fuels collectible strategy with releases tied to Sanrio and Jurassic World.
  • DTC Contribution: Direct-to-consumer revenue now 37% of total net revenue, up from prior periods.

Business Drivers

The growth was driven by efficiency gains through automation and AI initiatives, as well as the company's exclusive distribution and license agreements, which drive more than $365 million in annual sales. Direct-to-consumer revenue now contributes 37% of total net revenue, while the company's collectibles business, bolstered by the acquisition of Handmade by Robots, is showing significant strength. According to Jeff Walker, CEO, "We're seeing significant strength in our business, with various initiatives underway for 2026, including internal organic growth projects and other opportunities."

Valuation and Outlook

With a P/S Ratio of 0.33, Alliance Entertainment's valuation appears reasonable, especially considering the company's growth prospects. Analysts estimate next year's revenue growth at 4.1%, indicating a positive outlook. The company's EV/EBITDA ratio stands at 30.33, while its ROE is 19.35%, indicating a strong return on equity. As the company continues to drive growth through its various initiatives, its strong team and leadership are well-positioned to deliver strong results in 2026 and beyond.

Financial Position

The company ended the quarter with $3.2 million in cash, inventory of $121.7 million, and debt of $66 million. Subsequent to quarter-end, Alliance closed a new five-year $120 million senior secured revolving credit facility with Bank of America, reducing borrowing costs by up to 250 basis points. The new facility has reduced the company's interest expense by about $1.5 million per year, according to Jeff Walker.

3. NewsRoom

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Alliance Entertainment to Participate in NobleCon21

Nov -25

Source: newsfilecorp.com

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Alliance Entertainment Holding Corporation (AENT) Q1 2026 Earnings Call Transcript

Nov -13

Source: seekingalpha.com

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Alliance Entertainment Reports First Quarter Fiscal Year 2026 Results

Nov -12

Source: globenewswire.com

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Alliance Entertainment Holding Corporation (AENT) Shareholder/Analyst Call Prepared Remarks Transcript

Nov -06

Source: seekingalpha.com

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Alliance Entertainment to Participate in the 14th Annual ROTH Technology Conference

Nov -06

Source: globenewswire.com

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Alliance Entertainment to Host First Quarter Fiscal Year 2026 Results Conference Call on November 12 at 4:30 p.m. Eastern Time

Oct -29

Source: globenewswire.com

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Four Growth Stocks Powering The Fourth Industrial Revolution In 2025

Oct -28

Source: seekingalpha.com

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Alliance Entertainment to Present at the ThinkEquity Investor Conference

Oct -16

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Pre-recorded Music, Video Movies, Video Games and Related Accessories

Expected Growth: 4.8%

Growing demand for entertainment products, increasing adoption of digital gaming, and rising popularity of streaming services drive the growth of pre-recorded music, video movies, video games, and related accessories.

7. Detailed Products

Music Distribution

Alliance Entertainment Holding Corporation distributes music products to retailers and online platforms, offering a wide range of music genres and formats.

Video Distribution

The company distributes DVDs, Blu-rays, and digital video content to retailers and online platforms, offering a vast library of movies and TV shows.

Consumer Electronics

Alliance Entertainment Holding Corporation offers a range of consumer electronics, including headphones, speakers, and accessories, to retailers and online marketplaces.

Gaming Distribution

The company distributes video games and gaming accessories to retailers and online platforms, offering a wide range of titles and formats.

E-commerce Fulfillment

Alliance Entertainment Holding Corporation provides e-commerce fulfillment services, including order processing, shipping, and customer service, to online retailers and brands.

8. Alliance Entertainment Holding Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Alliance Entertainment Holding Corporation is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Alliance Entertainment Holding Corporation is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Alliance Entertainment Holding Corporation is moderate, as the company relies on a few key suppliers, but has some negotiating power.

Threat Of New Entrants

The threat of new entrants for Alliance Entertainment Holding Corporation is high, as the industry is attractive and there are low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry for Alliance Entertainment Holding Corporation is high, as the industry is highly competitive and there are many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.15%
Debt Cost 5.54%
Equity Weight 34.85%
Equity Cost 5.54%
WACC 5.54%
Leverage 186.94%

11. Quality Control: Alliance Entertainment Holding Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Alliance Entertainment Holding

A-Score: 4.1/10

Value: 5.7

Growth: 2.7

Quality: 5.9

Yield: 0.0

Momentum: 10.0

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Dolphin Entertainment

A-Score: 3.7/10

Value: 8.6

Growth: 4.0

Quality: 3.6

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

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Reservoir Media

A-Score: 3.7/10

Value: 4.5

Growth: 2.6

Quality: 4.5

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Reading International

A-Score: 3.6/10

Value: 8.2

Growth: 2.7

Quality: 3.4

Yield: 0.0

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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AMC Entertainment Holdings

A-Score: 3.4/10

Value: 8.5

Growth: 3.1

Quality: 5.5

Yield: 0.0

Momentum: 1.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
HOFRE

A-Score: 3.1/10

Value: 10.0

Growth: 3.7

Quality: 3.6

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.32$

Current Price

7.32$

Potential

-0.00%

Expected Cash-Flows