Newsmax Stock Plummets Amid Sell-Off Despite Positive Signals

Newsmax (NYSE: NMAX) shares fell 10% amid sell-offs, even as broader markets gained. A renewed contract with Greta Van Susteren offered a silver lining, but skepticism looms over future growth prospects. Investors should tread carefully on this volatile stock.

Date: 12-04-2025

AI Rating: 5

Market Performance and Selling Pressure

Newsmax has recently experienced significant selling pressure, with shares dropping 10% despite a rally in the broader market, including a 1.8% gain in the S&P 500. This disconnection from market trends raises questions about investor sentiment towards Newsmax, which has been volatile since its IPO.

Recent Developments

The announcement of a multiyear hosting extension with Greta Van Susteren was a positive move for Newsmax. Such developments contribute positively to brand visibility and potential viewership retention. However, investors seemed to react more to the fading momentum of the stock rather than the immediate positive news, leading to profit-taking.

Valuation Metrics

Newsmax's current market capitalization is approximately $2.94 billion against reported sales of $171 million, valuing the stock at about 17.2 times revenue. This high valuation multiple can be alarming, especially given the company reported a net loss of $72 million last year. This suggests a need for cautious assessment of the stock for potential buyers.

Growth Outlook

While the company reported a 26% revenue growth year-over-year, future growth could be at risk, especially without electoral cycle tailwinds. The anticipated decrease in sales growth poses a considerable risk for investors, especially given the current high valuation.

Bottom Line

For investors considering Newsmax, the combination of recent losses, a high valuation, and looming uncertainties over sales growth suggests a cautious approach may be warranted. The stock's performance in the coming months will likely depend heavily on broader market trends and any new developments in ratings or revenue-driving events.

Stocks: NMAX