Newsmax (NMAX 0.23%) executed one of a wildest IPOs of 2025. The conservative media company went public at $10 on March 31, but it closed at $83.51 on its first day and nearly tripled to a record closing price of $233 per share the next day. That rally was driven by the company’s association with President Donald Trump, its limited supply (it only offered 6% of its shares in its IPO), and the same meme stock dynamics that lifted other Trump-related stocks.

At its peak, Newsmax’s market cap swelled to $29 billion, or 170 times the $171 million in revenue it generated in 2024. But today, Newsmax’s stock trades at about $13 with a market cap of $1.7 billion, which still isn’t a bargain at 10 times last year’s sales.

Image source: Getty Images.

Newsmax’s meme stock valuations were clearly unsustainable, and its steep losses, messy legal battles, and ongoing dilution indicated it wasn’t a great long-term investment. But can it stabilize its business over the next three years?

What happened to Newsmax over the past few years?

Newsmax was founded in 1998. It was originally an online and print media company before it launched its linear TV platform, Newsmax TV, for satellite and cable networks in 2014. Over the following decade, Newsmax flourished as a conservative alternative to mainstream media networks like Fox News.

Its growth accelerated under the first and second Trump administrations, but it was also criticized for disseminating conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.S. Capitol, and COVID-19 vaccines. Newsmax’s controversial claims about the 2020 elections sparked defamation lawsuits from the voting system suppliers Smartmatic and Dominion. Newsmax agreed to pay a $40 million settlement to Smartmatic last year, but it hasn’t reached a settlement with Dominion.

Its payments to Smartmatic — along with the costs of expanding its infrastructure to support its higher viewership rates up to the election — caused its net loss to widen significantly in 2024. Newsmax’s higher viewership rates boosted its advertising, cable licensing, and subscription revenues in 2024, but its higher expenses offset those gains.

Data source: Newsmax.

Newsmax claims to reach 40 million people through its cable, satellite, and digital channels. According to Nielsen’s data from April, Newsmax tied Fox News among 35 to 64-year-old viewers, while 3.7 million viewers only watched Newsmax and never watched Fox News.

What will happen to Newsmax over the next three years?

In the first quarter of 2025, Newsmax’s revenue rose 12% year over year to $45 million as it narrowed its net loss from $51 million to $17 million. But its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) — which excludes its easy comparisons to the Smartmatic settlement — still dropped from $4.4 million to negative $1.2 million.

Newsmax hasn’t provided any guidance for the rest of the year, and Wall Street’s top analysts aren’t actively covering the stock or setting any longer-term growth targets yet. This makes Newsmax a tough stock to value, but its near-term catalysts and challenges are obvious. Its catalysts include its ongoing coverage of the Trump administration’s latest actions, the 2026 midterm elections, and higher ad spending from conservative donors and PACs.

It could also pull more viewers from Fox News, especially if Trump continues to promote Newsmax and more conservative viewers shun Fox as a “mainstream” media network. The ongoing expansion of Newsmax’s digital media platform and its Newsmax+ subscription service could lock in more of its users and widen its moat against Fox and other competitors.

Newsmax’s biggest challenges include its legal battle with Dominion, which could result in another massive settlement, and its potential carriage disputes with pay TV providers. Newsmax was previously free-to-air, but it’s now demanding carriage fees to carry its channel. DIRECTV temporarily dropped Newsmax in 2023 over those fees, and it could run into similar conflicts with Comcast, Verizon, and Charter in the future.

Dilution is another major near-term problem for the stock. In a recent SEC filing, Newsmax said it would let some of its earlier investors sell up to 121 million shares on the open market — compared to its 89.7 million outstanding shares on the market today.

Lastly, there are persistent rumors that Newsmax, which is still majority-owned by its founder Christopher Ruddy, could merge with another conservative-leaning media company. Some potential candidates would be Trump Media, which owns Truth Social, or the conservative streaming media platform Rumble.

Where will Newsmax’s stock be in three years?

From 2021 to 2024, Fox’s revenue grew at a compound annual growth rate (CAGR) of just 3%. Assuming Newsmax grows at a faster CAGR of 5% from 2024 to 2027 — and still trades at 7 times its trailing sales at the beginning of 2028 — its stock price could rise 16% over the next three years. That’s a decent gain, but it could still underperform other media stocks as well as the S&P 500, which has delivered an average annual return of 10% since its inception.