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 key metrics, including a P/E ratio of 14, an EV to EBITDA of 9.96, and a PEG ratio of 0.01, which suggests significant growth potential relative to its price. In comparison, peers like Climb Global Solutions, Inc. have a higher P/E of 26.60 and EV to EBITDA of 15.98, while Taitron Components, Inc. shows a P/E of 20.90, highlighting that Alliance may be trading at a discount relative to its industry.
Despite recent challenges, including a YTD stock return of -36.31% compared to the S&P 500's 13.30%, the strong 1-year return of 67.25% indicates potential recovery and growth. This performance, coupled with the attractive valuation metrics, reinforces the conclusion that Alliance Entertainment Holding Corp. is currently undervalued.