Is Newsmax Stock a Buy Now?

Core Viewpoint - Newsmax's stock has significantly declined from its initial surge post-IPO, raising questions about its investment potential in a challenging digital media landscape [1][2]. Company Overview - Newsmax is a conservative media network that gained attention during a quiet year for IPOs, initially seeing its stock price rise to $265 per share shortly after its IPO [1]. - The stock has since fallen to just above $12 per share, nearing its all-time low [2]. Financial Performance - In Q1, Newsmax reported revenue growth of 11.6%, reaching $45.3 million, indicating it is still a small player in the industry despite being the fourth-highest-rated cable news channel with over 33 million quarterly viewers [5][6]. - The growth in revenue was balanced across advertising, affiliate revenues, and subscriptions, with advertising accounting for nearly two-thirds of total revenue [5]. - The company achieved a record of 33.6 million viewers in the quarter, a 50% increase from the previous year, although this may be attributed to external factors such as Trump's inauguration [6]. - Newsmax reported an adjusted EBITDA loss of $1.2 million, down from a profit of $3.2 million a year ago, and a GAAP loss of $17.2 million, or $0.49 per share [7]. Market Position and Valuation - Newsmax's stock is currently trading at a price-to-sales ratio of 9, which is considered high compared to its peers like Fox Corporation, which has a P/E ratio of 14 and a P/S ratio of 1.6, and Sinclair, trading at a P/E of 7 and a P/S of 0.3 [9][10]. - The company is exploring growth opportunities in both linear and digital channels, including streaming and a small product business [8]. Investment Outlook - Despite double-digit revenue growth, Newsmax is still unprofitable and its stock is more expensive than its peers, leading to a cautious investment outlook [11]. - Currently, Newsmax is not considered a buy, with the potential for a change in status if its financial performance improves or its valuation decreases [12].