Why Newsmax Stock Sank 17.4% Last Month, but Has Inched Higher in July

Key Points

• Bullish momentum for the broader market wasn't enough to prevent Newsmax stock from a double-digit sell-off in June.

• Newsmax's new sales guidance for this year underwhelmed investors.

• After growing revenue 26% in 2024, management expects Newsmax's sales to increase roughly 8% in 2025.

• 10 stocks we like better than Newsmax ›

Newsmax (NYSE: NMAX) stock got hit with another surge of sell-offs in June despite strong gains for the broader market. The company's share price fell 17.4% in the month, according to data from S&P Global Market Intelligence. For comparison, the S&P 500 (SNPINDEX: ^GSPC) gained 5% in the period.

Newsmax stock lost ground after the company issued business updates and new forward performance guidance for this year. While the broader market rallied on signs that the Federal Reserve may issue more interest rate cuts this year than previously anticipated, the bullish macroeconomic catalyst wasn't enough to prevent a big dip for the media specialist's share price.

Newsmax stock sank in June due to a softer sales growth outlook

On June 10, Newsmax published an update detailing May ratings for its free Newsmax2 streaming channel. The company said that the service had seen a 25% year-over-year increase in total viewership in the month, and that the platform had logged more than 21.5 million cumulative viewers in the month. Meanwhile, average watch time on the platform was up 36% compared to May 2024.

The next day, Newsmax published a press release announcing that foreign policy expert and diplomat Paula J. Dobriansky had been appointed to its board of directors. Interestingly, the company paired the announcement with an update on its sales guidance.

Newsmax is targeting sales between $180 million and $190 million this year. At the midpoint of its guidance range, that would mean posting annual revenue growth of roughly 8% over the $171 million in sales it posted in 2024. On the heels of the roughly 26% revenue growth it recorded last year, investors weren't happy with the growth target for 2025.

Why is Newsmax stock up in July?

As of this writing, Newsmax stock has climbed roughly 1.5% across July's trading -- outperforming a gain of roughly 0.3% for the S&P 500 index across the stretch. The modest positive momentum appears to be connected to the announcement that Newsmax's core channel has now been made available internationally through inclusion on Truth+ -- a streaming platform run by Trump Media.

Newsmax stock has seen huge valuation swings since going public at the end of March. Meme stock trading initially powered a massive rally for the company's share price, but the momentum has since reversed, and the stock is now down roughly 67% over the last three months.

Even with the pullback, the company is still valued at roughly 10 times the midpoint of management's sales forecast for this year. While the stock may be able to bounce back above current levels, guidance for a substantial sales-growth deceleration this year suggests that the business will need to continue to broaden the reach of its media content and improve monetization across channels.

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Keith Noonan 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.

Why Newsmax Stock Sank 17.4% Last Month, but Has Inched Higher in July was originally published by The Motley Fool