Is Alliance Entertainment Holding Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Alliance Entertainment Holding Corp. has moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears undervalued based on its current metrics, particularly with a P/E ratio of 14, which is significantly lower than the peer average of approximately 23.93. Additionally, the EV to EBITDA ratio stands at 9.96, suggesting that the company is trading at a discount compared to its peers, such as Climb Global Solutions, Inc., which has an EV to EBITDA of 15.98.
The PEG ratio of 0.01 further emphasizes the undervaluation, indicating that the stock is priced very low relative to its growth potential. Despite recent challenges, with year-to-date returns of -36.31% compared to the S&P 500's 13.30%, the company's strong one-year return of 67.25% suggests potential resilience and recovery. Overall, the combination of these valuation ratios and the improved grade supports the conclusion that Alliance Entertainment Holding Corp. is currently undervalued.