ALLIANCE ENTERTAINMENT HOLDING CORPORATION

AI-generated fair value estimate for this company.

Method: 10-year levered free-cash-flow-to-equity DCF: normalized FCF base of ~$25M (average of actual FCF: FY23 $2.6M, FY24 $55.6M, FY25 $26.8M, TTM $17.1M, smoothing large working-capital swings typical of a physical-media/collectibles distributor); FCF growth of 8%/yr years 1-5 tapering to 4%/yr years 6-10; 2% terminal growth; 13.5% cost of equity; FCF figures are already net of ~$7.6M annual interest expense on the $73.7M revolver so net debt is not separately subtracted; 50.98M shares. PV of explicit FCFs ~$183.6M + PV terminal value ~$111.8M ~$295.4M equity value.

Reasoning: AENT's operating cash flow is highly volatile due to inventory/working-capital swings in a low-margin distribution model, so a single-year FCF yield or static multiple would be noisy; a smoothed multi-year FCF DCF that nets out interest gives a more stable read, implying modest undervaluation versus the $5.00 market price.