Friday’s closing saw the Newsmax stock price at $7.44, following a modest afternoon rally. The acceleration coincided with higher-than-average options activity, suggesting speculative positioning ahead of next week’s corporate announcement. My biggest hesitation about buying Newsmax stock, though, is its valuation. Even after the steep sell-off, the company's market cap stands at around $6.4 billion, which is over 37 times its 2024 sales. To put that multiple into perspective, Fox's shares trade at only 1.37 times sales. Newsmax's revenue growth doesn't justify such a premium price. Newsmax has gone on an amazing run following its IPO. However, there are several warning signs that should give investors caution before jumping into this scorching hot IPO. The company's combination of losses, sky-high valuation, and an eventual surge in new shares could cause the stock to give back a big chunk of its gains. Because of that, you might want to just watch this show from the sidelines to avoid getting burned when that downdraft eventually occurs. Despite minor intraday dips, Newsmax stock price closed higher for the third consecutive day at $7.
