Why Newsmax Stock Surged This Week

Newsmax (NYSE: NMAX) stock posted big gains in this shortened week of trading. At the closing bell this past Thursday, the company's share price was up 11.6% from the previous week's market close.

Newsmax's big gains came on the heels of even bigger sell-offs in the previous week's trading. While there wasn't much in the way of business-specific news behind the recovery, the media company's share price moved higher in conjunction with rebound trading and meme-stock momentum.

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Newsmax stock sees a significant rebound

Despite the S&P 500 index falling 1.5% from last week's market close, Newsmax was able to close out the stretch with solid double-digit gains. The stock had fallen roughly 49% the previous week due to meme-stock volatility and news that a U.S. district court ruled that the company had made defamatory statements about Dominion Voting Systems. The legal dispute is now headed to a jury trial.

What's next for Newsmax

Last year, Newsmax's revenue increased 26% annually to reach $171 million. It looks like strong growth could be poised to continue in the near term. In a press release published last week, Newsmax reported that the latest tracking data from Nielsen showed strong viewership growth. Newsmax's total day viewership increased by 690% in the first quarter, and the network saw a 1,027% increase in viewership for the crucial prime-time slots.

On the other hand, it remains to be seen to what extent the viewership will translate to increased advertising spending and help push Newsmax closer to overall profitability. The business posted a loss of $72 million last year and is now valued at approximately 17 times its 2024 sales after valuation gains this week.

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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.