Considering a 8% decline, is it a suitable moment to purchase more shares in Newsmax?
Newsmax, the cable and video streaming news service, has seen its financial performance and legal issues significantly impact its stock price and long-term outlook.
In the first quarter of 2024, Newsmax experienced a 12% year-over-year growth in revenue, reaching $45.3 million. Total viewership also increased by 50% to 33.6 million people. However, the company's growth guidance for 2025 is more conservative, targeting sales between $180 million and $190 million, representing about 8% growth. This slower growth target has disappointed investors, contributing to a decline in the stock price.
Newsmax's stock has been highly volatile since its IPO at the end of March 2025. Initially, meme stock trading helped rally its share price, but the momentum reversed, and the stock fell roughly 67% over the three months leading up to July 2025. As of July 2025, the stock showed slight positive momentum, gaining about 1.5%, partly due to international expansion via the streaming platform Truth+ run by Trump Media.
Despite growing viewership and new distribution deals, Newsmax reported a net loss of $17.2 million in its first earnings report as a public company, signaling ongoing profitability challenges. This loss, despite rising revenue and viewership, raises concerns about its financial stability.
Newsmax is also known for its political slant to the right and has been sued by Dominion Voting Systems for $1.6 billion in damages in a similar lawsuit. However, the search results do not specifically mention any current or past legal issues involving Newsmax, and their impact on its stock price and outlook cannot be directly assessed from available information.
The company's long-term outlook depends on its ability to convert increasing viewership into consistent profitability and to manage the risks of a politically cyclical audience base. Newsmax's partisan content strategy may limit its appeal to a broader audience, making its viewership and revenue potentially subject to fluctuations tied to political interest cycles.
Recent international expansion and board appointments may support growth, but investor caution remains due to the tempered growth guidance. Newsmax needs to better align audience and revenue growth, avoid cash-draining lawsuits, and consistently narrow those net losses to become a more tempting investment. The company holds a strong position as the fourth highest-rated cable news channel and reaches over 40 million Americans regularly across various platforms, indicating a solid audience base and brand recognition.
In light of the conservative growth target for 2025 and the disappointing response from investors, Newsmax faces challenges in attracting more investment for its future financing and business expansion. Despite rising revenue and viewership, the concerns about its financial stability due to ongoing profitability challenges could potentially deter potential investors, thereby impacting the company's long-term finances and business prospects.
