Is Newsmax stock a purchase?

Politically tilted news media newsmax (NYSE: NMAX) It will be open in late March in an initial public offering, which may easily be overlooked. However, the company's stock soared. Newsmax Stock ended its first day of trading, and its trading was more than 5 times higher than the beginning. By the end of the next day, the company exploded again and closed for a day around $233 per share. Newsmax immediately became a good old-fashioned meme stock. Stocks have fallen sharply since then, but on June 3 the stock closed around $19, and nearly double the people who managed to get it at the IPO price.

Investors are wondering now, is Newsmax now buying?

NewsMax not only runs a wired network with multiple TV channels, but it also creates original content on its flagship website Newsmax.com and creates original content through various podcasts, broadcasts, and other digital and print publications. The company's main source of revenue is through advertising, subscriptions and membership revenue sources.

Image source: Getty Images.

In the first quarter of 2025 Nelson Holdings Newsmax is the fifth largest cable channel and the fourth largest news channel, the report said. The Nelson report also showed that the first quarter news Max had 33.6 million viewers, a 50% increase from the same period in 2024. In addition, about 15 million viewers in the most important crowds at the age of 35 to 64, up 63% from last year.

Newsmax has been providing news coverage that supports President Donald Trump, which seems to have attracted a loyal audience of the president in the process. This connection with Trump serves stocks well. It seems investors think that a large number of Trump’s followers may redefine the media landscape, or they just want to capitalize on his popularity or ability to spread.

But nowadays, even successful media can be challenging. In 2024, Newsmax reported a net loss of more than $72 million. In the first quarter of 2025, the company reported a net loss of more than $17 million, compared with a net loss of more than $56 million in the previous year, resulting in more than $56 million incurred due to huge legal and solution losses. Revenue rose by about 12% in the first quarter.

Newsmax is certainly causing a sensation in the cable news space and has risen since the release of the first cable news channel. But most of its existence was in the Trump era, and the network undoubtedly benefited from it, all media benefited in some capacity.

One question investors may want to ask is whether this popularity will continue after Trump’s second semester is over. Unfortunately, there is no specific answer. Given that the channel is already very popular, there are other conservative politicians, but it might be interesting to have only one Donald Trump, so it would be interesting to see how audience trends will trend after the president’s second term.

Newsmax is very expensive when it comes to valuation, and when I wrote this, the market cap was $2.86 billion, but it was still unprofitable. This pays attention to the company about 17 times the sales in 2024. Plus, because Newsmax trading is like trading with emotionally shaken meme stocks, it may continue to be very turbulent, which makes the risk to investors even more. I'm sure cable news will always have a place in the media landscape, especially for top players. But it's not a fast-growing, exciting sector, so I think investors will be able to find a lot of better opportunities elsewhere.

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Bram Berkowitz has no position in any of the stocks mentioned. Motley fool has no position in any stock mentioned. Motley Fool has a disclosure policy.

Is Newsmax stock a purchase? Originally published by Motley Fool