Is Newsmax Stock a Buy?

Politically right-leaning news outlet Newsmax (NYSE: NMAX) went public in an initial public offering in late March that could have easily gone unnoticed. However, shares of the company soared out of the gate. Newsmax stock closed its first day of trading more than 5 times higher than it started. By the end of day two, the company had blasted off again and closed the day around $233 per share. Newsmax had instantly become a good, old-fashioned meme stock. While shares have fallen significantly since then, the stock closed at around $19 on June 3, nearly a double for those who managed to get in at the IPO price.

Investors are now wondering, is Newsmax a buy now?

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Benefiting from ties to President Trump

Newsmax not only runs a cable network with several television channels, but also creates original content on its flagship website, Newsmax.com, and through various podcasts, radio, and other digital and print publications. The main sources of revenue for the company are through advertising, subscription, and affiliate revenue.

Image source: Getty Images.

In the first quarter of 2025, Nielsen Holdings reported that Newsmax was the fifth-most-watched cable channel and the fourth-most-watched news channel. The Nielsen report also showed that Newsmax had 33.6 million viewers in the first quarter, up 50% from the same period in 2024. Furthermore, roughly 15 million viewers in the all-important 35-to-64 age demographic tuned in, up 63% from last year.

Newsmax has consistently produced news coverage supportive of President Donald Trump and seems to have captured the president's loyal audience in the process. That link to Trump is serving the stock well. It seems either investors believe that Trump's massive following can potentially redefine the media landscape, or they are simply looking to capitalize on his popularity or ability to go viral.

But these days, running even a successful media outlet can be challenging. In 2024, Newsmax reported a net loss of over $72 million. In the first quarter of 2025, the company reported a net loss of over $17 million, which is a strong improvement from the net loss of over $56 million in the prior-year period that occurred due to significant legal and settlement losses. Revenue grew about 12% in the first quarter.

Is the stock a buy?

Newsmax has certainly made waves in the cable news space and has risen in the ranks since launching its first cable news channel. However, most of its existence has been in the Trump era, and the network has no doubt benefited from that, as have all media outlets in some capacity.

One question investors may want to ask is whether this popularity will continue after Trump's second term ends. Unfortunately, there's no concrete answer. It's possible it will, given that the channel is already extremely popular and there are other conservative politicians, but there is only one Donald Trump, so it'll be interesting to see how viewership trends following the president's second term.

On valuation, Newsmax is incredibly expensive, trading with a $2.86 billion market cap, as I write this, while still unprofitable. That values the company at about 17 times 2024 sales. Also, because Newsmax has traded like a meme stock moved by emotion, it could continue to be extremely volatile, making it even more risky for investors. I'm sure cable news will always have a place in the media landscape, especially for the top players. But it's not exactly a fast-growing, exciting sector, so I think investors will be able to find plenty of better opportunities elsewhere.

Should you invest $1,000 in Newsmax right now?

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