Why Newsmax Stock Sank 12.3% Last Month But Is Soaring in April
Key Points
Newsmax stock fell after the company announced a new appointment for its board of directors and board audit committee.
The stock also moved lower following the company's Q4 release even though the report contained good news.
Newsmax (NYSE: NMAX) stock recorded another month of double-digit sell-offs in March's trading. The media company's share price declined 12.3% across the stretch amid a 5.1% decline for the S&P 500 and a 4.8% decline for the Nasdaq Composite.
Newsmax stock saw volatility in conjunction with the Iran war and other news. While the company's share price initially climbed following the commencement of the war, it lost some ground as the month progressed and saw a substantial sell-off following the announcement of a new board member and the media specialist's fourth-quarter report.
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Newsmax's board member announcement coincided with a sell-off
On March 23, Newsmax announced that it had appointed Dave Evans to its board of directors. The company also announced that it had appointed Evans to the audit committee of the board. While it's impossible to state with certainty that news of Evans appointments triggered sell-offs for the stock, it's possible that the audit-committee appointment news raised fears among investors that Newsmax could have concerns about some financial reporting or internal-control elements at the company.
Newsmax stock continued to slide in March after earnings
Unlike most stocks, Newsmax actually saw valuation gains following the kickoff of the U.S. and Israel's war with Iran at the end of February. As a company specializing in political media coverage, investors may have been betting that the conflict would increase viewership for the network. The stock significantly outperformed the broader market for much of last month, but bullish momentum receded as March progressed. Newsmax's share price then saw a big sell-off in response to the publication of the company's Q4 results on March 26.
Newsmax recorded revenue of $52.2 million in the fourth quarter, which actually surpassed the average Wall Street analyst estimate by roughly $8.2 million. The company's net loss of $3 million marked a significant improvement over the $6.9 million net loss it recorded in the prior-year period, and the business's loss of $0.04 per share in the period was $0.03 per share lower than the average analyst forecasts.
The company closed out last year with sales of $189.3 million -- up 10.7% on a year-over-year basis. Meanwhile, the company anticipates that full-year sales for 2026 will come in between $212 million and $216 million -- good for annual growth of roughly 13% at the midpoint of the guidance range. The company also said that it expected an improved operating-profit profile stemming from reduced legal and public-company transition expenses.
With Newsmax actually guiding for a meaningful acceleration for sales growth this year and lower expenses, the company's Q4 report actually delivered some good news for investors. The stock actually saw significant gains in after-hours trading on the day of its earnings report, but shares sold off in the next daily session.
Newsmax's results and guidance may not have been strong enough to support the company's valuation in the eyes of investors. On the other hand, the stock has seen rebound momentum in April -- with shares currently up 10% in the month as of this writing thanks to bullish momentum for the broader market.
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.