Newsmax had one of the most dramatic IPOs in memory, with its stock rising 1,800% in two days.
The media company has seen viewership increase substantially and revenue rise.
Still, I’m not sure the valuation adds up.
In one of the most dramatic initial public offerings (IPOs) in memory, media company Newsmax(NYSE: NMAX) saw its stock skyrocket nearly 1,800% in the first two days of trading. The shares began trading on March 31 at $14 before rising as high as $265 the next day. While the euphoria has faded and the stock has come back to earth, it’s still trading for substantially more than the IPO price.
Given this crazy run, is the stock capable of doing something like that again? Could investing in it make you a millionaire?
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Newsmax is a conservative news and opinion media company that operates a cable TV channel, a website, print publications, and several other ventures, like a supplement and nutraceutical business. While the company has been around for decades, it’s grown dramatically in popularity during the past few years, becoming a national name as an alternative to Fox News.
As a media company, Newsmax’s revenue is directly tied to its viewership numbers. The more people who watch and engage with its content, the more valuable its ad space. The company’s IPO came just as its viewership spiked.
A recent Nielsen ratings report showed Newsmax viewership is rising across all parts of the day and for almost every single show it offers. Newsmax is now the fifth most-watched cable channel and is the fourth most-watched cable news channel. An impressive 33.6 million viewers watched the network during Q1 in 2025, up 50% year over year.
Although the company’s most recent financial filings are only current through the end of 2024, the viewership uptick had already begun in 2024. The company’s revenue jumped 26% from 2023 to $171 million in 2024, driven primarily by its broadcast segment, which grew 41% over the same period and makes up more than 76% of its total revenue.
As positive as this double-digit percentage growth looks, it’s not the whole picture. The company reported a net loss of $72.2 million in 2024, more than the $41.8 million loss in 2023.
While broadcast revenue is growing, the company’s digital segment is actually shrinking, down 5.4% year over year. The company is also underwater on its balance sheet, with liabilities exceeding assets. That’s not a position that gives Newsmax much financial flexibility if things go south.
As promising as the Q1 viewership growth appears, there’s a pretty big asterisk above that number. Q1 2025 immediately followed a hotly contested election, which was the beginning of the second Trump Presidency, marked by controversy — which drives engagement. The first three months of 2024 were much quieter, comparatively.
It’s not the only news network to see a significant Q1 bump. Fox News was up 48% over the same period.
Speaking of Fox News, Newsmax is still miles away from the kind of viewership Fox commands. Here’s just how much: The 15th most-watched show on Fox News has three times as many viewers as Newsmax’s top program. All 15 of the most-watched shows on cable appear on Fox.
The company is currently being sued by Dominion Voting Systems for its coverage of the 2020 election. Recently, a Delaware Superior Court ruled that there was “clear and convincing evidence” that Newsmax made defamatory statements about Dominion, and that the channel falsely claimed the company rigged votes during the election.
The case now goes to a jury, which will determine whether Newsmax knew its claims were false and, if so, award damages to Dominion, which is seeking $1.6 billion — posing an existential threat to the company. Newsmax likely wouldn’t survive a penalty of that size, though there’s no guarantee it will face such a penalty.
The company could still win the suit. The penalty awarded could also be significantly smaller, even if it loses.
Even if Newsmax wasn’t facing litigation of this size, I think the stock is wildly overpriced. The company has a shaky balance sheet and is operating at a significant loss, and its stock trades at around 17 times sales. Fox’s viewership dwarfs that of Newsmax, but its stock trades at just 1.5 times sales. Yes, there’s more room to grow as a smaller company with a smaller viewership, potentially poaching viewers from Fox, but not enough room.
Could Newsmax stock make you a millionaire if you invested 10,000? No. In fact, I would stay away from the stock entirely at this point.
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Johnny Rice 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.
