Alliance Entertainment (NASDAQ:AENT) Releases Quarterly Earnings Results

Alliance Entertainment (NASDAQ:AENT) released its earnings results on Thursday. The company reported $0.18 EPS for the quarter, missing analysts’ consensus estimates of $0.31 by ($0.13), Zacks reports. Alliance Entertainment had a net margin of 1.80% and a return on equity of 21.87%.

Here are the key takeaways from Alliance Entertainment’s conference call:

• Profitability and margin expansion: Alliance reported net income of $9.4M and Adjusted EBITDA of $18.5M in Q2, with gross margin up 210 bps to 12.8%, reflecting what management calls a durable, higher-quality earnings baseline.
• Shift to premium physical media and exclusives: Management attributes improved pricing and sell-through to a move toward premium formats (4K, Steelbooks) and exclusive studio deals, including Paramount and the new Amazon MGM agreement.
• Collectibles and authentication platform as growth drivers: Collectibles revenue grew ~31% YoY, and the NState/Alliance Authentic initiative (NFC-enabled authentication and digital identity) is being positioned as a platform to monetize primary sales, authenticated resale, and deepen licensor ties.
• Category volatility from gaming and arcade declines: Quarterly revenue fell to $369M (from $394M) largely due to a $34M decline in arcade sales and a $24M drop in gaming hardware, driven by supply constraints and transitions with partners like Arcade1Up/Basic Fun!.
• Stronger liquidity and lower borrowing costs: Alliance replaced its prior ABL with a $120M five-year senior secured revolver that lowers borrowing costs by up to 250 bps and is intended to support working capital for premium inventory and strategic initiatives.

Alliance Entertainment Trading Down 7.1%

AENT traded down $0.49 during trading on Thursday, hitting $6.38. 458,401 shares of the stock were exchanged, compared to its average volume of 73,537. The company has a debt-to-equity ratio of 0.62, a quick ratio of 0.64 and a current ratio of 1.28. The firm has a 50 day simple moving average of $7.54 and a 200 day simple moving average of $6.62. The firm has a market cap of $325.12 million, a price-to-earnings ratio of 16.36 and a beta of 0.46. Alliance Entertainment has a 1 year low of $2.21 and a 1 year high of $8.80.

Institutional Trading of Alliance Entertainment

Several institutional investors and hedge funds have recently made changes to their positions in AENT. Empowered Funds LLC lifted its stake in Alliance Entertainment by 10.3% in the fourth quarter. Empowered Funds LLC now owns 123,727 shares of the company’s stock worth $1,000,000 after acquiring an additional 11,562 shares during the period. O Shaughnessy Asset Management LLC lifted its position in shares of Alliance Entertainment by 91.5% in the 4th quarter. O Shaughnessy Asset Management LLC now owns 130,855 shares of the company’s stock worth $1,057,000 after purchasing an additional 62,510 shares during the period. Jacobs Levy Equity Management Inc. bought a new position in shares of Alliance Entertainment during the third quarter valued at approximately $193,000. Millennium Management LLC increased its holdings in Alliance Entertainment by 29.2% during the third quarter. Millennium Management LLC now owns 85,510 shares of the company’s stock valued at $582,000 after buying an additional 19,325 shares during the period. Finally, Bridgeway Capital Management LLC raised its stake in Alliance Entertainment by 10.1% in the third quarter. Bridgeway Capital Management LLC now owns 134,365 shares of the company’s stock worth $915,000 after buying an additional 12,290 shares in the last quarter. 0.27% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

Separately, Weiss Ratings reaffirmed a “hold (c)” rating on shares of Alliance Entertainment in a research report on Wednesday, January 21st. Two research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $10.67.

About Alliance Entertainment

Alliance Entertainment (NASDAQ: AENT) is a distributor of physical media and related entertainment products, serving retailers, public libraries and online merchants. The company’s core business revolves around the wholesale distribution of music and video titles on CD, DVD and Blu-ray formats, as well as vinyl records, audiobooks, video games and select gift and novelty items. By maintaining a broad catalog of new and catalog titles, Alliance Entertainment enables brick-and-mortar and e-commerce channels to access an extensive range of products from major and independent labels.

In addition to its product offerings, Alliance Entertainment provides supply-chain and logistics services designed to streamline inventory management and order fulfillment.