Trump Media & Technology Stock To $10?
Trump Media & Technology (DJT) stock has fallen 10% during the past day, and is currently trading at $14.41. Our multi-factor assessment suggests that it may be time to sell DJT stock. We have, overall, a pessimistic view of the stock, and a price of $10 may not be out of reach. We believe there are several things to fear in DJT stock given its overall Weak operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Very Unattractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Weak |
| Profitability | Very Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | Very Weak |
| Operating Performance | Weak |
| Stock Opinion | Very Unattractive |
Ask yourself – Is holding DJT stock risky? Of course it is. High Quality Portfolio mitigates that risk.
Let’s get into details of each of the assessed factors but before that, for quick background: With $4.0 Bil in market cap, Trump Media & Technology is a blank check company planning mergers, stock exchanges, or acquisitions, with no significant operations since its 2020 incorporation in Miami, Florida.
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[1] Valuation Looks Very High
| DJT | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 1118.2 | 3.2 |
| Price-to-Earnings Ratio | -28.5 | 23.5 |
| Price-to-Free Cash Flow Ratio | -655.5 | 20.7 |
This table highlights how DJT is valued vs broader market. For more details see: DJT Valuation Ratios
[2] Growth Is Very Weak
- Trump Media & Technology has seen its top line shrink at an average rate of -8.9% over the last 3 years
- Its revenues have grown 9.1% from $3.4 Mil to $3.7 Mil in the last 12 months
- Also, its quarterly revenues declined -3.8% to $1.0 Mil in the most recent quarter from $1.0 Mil a year ago.
| DJT | S&P 500 | |
|---|---|---|
| 3-Year Average | -8.9% | 5.5% |
| Latest Twelve Months* | 9.1% | 6.0% |
| Most Recent Quarter (YoY)* | -3.8% | 7.3% |
This table highlights how DJT is growing vs broader market. For more details see: DJT Revenue Comparison
[3] Profitability Appears Very Weak
- DJT last 12 month operating income was $-170 Mil representing operating margin of -4618.7%
- With cash flow margin of -155.1%, it generated nearly $-5.7 Mil in operating cash flow over this period
- For the same period, DJT generated nearly $-144 Mil in net income, suggesting net margin of about -3919.8%
| DJT | S&P 500 | |
|---|---|---|
| Current Operating Margin | -4618.7% | 18.8% |
| Current OCF Margin | -155.1% | 20.4% |
| Current Net Income Margin | -3919.8% | 13.1% |
This table highlights how DJT profitability vs broader market. For more details see: DJT Operating Income Comparison
[4] Financial Stability Looks Very Strong
- DJT Debt was $954 Mil at the end of the most recent quarter, while its current Market Cap is $4.0 Bil. This implies Debt-to-Equity Ratio of 23.2%
- DJT Cash (including cash equivalents) makes up $1.3 Bil of $3.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 39.9%
| DJT | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 23.2% | 21.0% |
| Current Cash-to-Assets Ratio | 39.9% | 7.1% |
[5] Downturn Resilience Is Very Weak
DJT has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- DJT stock fell 87.2% from a high of $97.54 on 4 March 2022 to $12.46 on 23 June 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $66.22 on 27 March 2024 , and currently trades at $14.41
| DJT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -87.2% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read DJT Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.