Perhaps no stock’s performance is more impacted by President Donald Trump’s actions than Trump Media & Technology Group (DJT -10.44%). Although the Trump administration’s recent tariff policies affected the entire stock market, Trump Media has specifically stated its success depends in part on President Trump’s popularity.

This has played out in Trump Media’s share price, which zoomed up to a 52-week high of $54.68 just days before the presidential election. But economic uncertainty fueled by inflation and further impacted by the dynamic tariff situation sank the company’s stock. At the time of this writing, its share price is less than half what it was before Donald J. Trump’s election win.

Does this bring Trump Media shares into buy territory? Or do reasons exist to avoid the stock? Let’s dig into the company to find out.

Image source: Getty Images.

Trump Media’s business performance

Trump Media relies entirely on revenue from digital advertising run on Truth Social, its social media platform. The company also provides consumers a streaming video product, Truth+, and recently announced a financial offering called Truth.Fi. However, by the end of the first quarter, neither Truth+ nor Truth.Fi had produced income.

Trump Media’s sole source of sales, Truth Social, delivered $821,200 in Q1 revenue, a 7% increase from the prior year. This is a promising start to 2025 since the company ended 2024 with a 12% year-over-year decline in sales to $3.6 million.

In addition, Trump Media boasts a strong balance sheet. Total assets were $918.9 million compared to $27.2 million in total liabilities at the end of Q1. The company has amassed a war chest of $759 million in Q1 cash, cash equivalents, and short-term investments. But that’s where Trump Media’s strengths end.

Areas of concern with Trump Media

An investment in Trump Media carries several outsized risks. Perhaps the biggest is that 93% of its revenue comes from a single customer. If that client decides to leave, Trump Media’s income collapses.

Also, the company is standing on shaky financial ground. Trump Media is not profitable, with a Q1 net loss of $31.7 million. This is because its Q1 operating costs totaled $40.4 million.

But a greater issue is the tepid revenue generated from Trump Media’s offerings. Truth Social’s sales aren’t covering its expenses, so it’s crucial for the company’s new Truth+ and Truth.Fi products to provide income soon. Another concern is that Trump Media noted in its Q1 earnings report that there existed “material weakness in our internal controls over financial reporting,” and it lacked “accounting personnel who have the requisite experience in [Securities and Exchange Commission] reporting regulation.”

This means its financial statements could contain errors and, depending on the extent of those mistakes, may lead to a misrepresentation of Trump Media’s finances. Although the firm is working to address this issue, the integrity of its earnings reports is questionable at this time.

Making a decision on Trump Media stock

Trump Media is in a precarious predicament, given the high costs of operating its business relative to the meager sales it’s bringing in. However, its emerging products might deliver the revenue Trump Media desperately needs, and its excellent balance sheet can sustain the company while these products build up their income streams.

So, does the company’s substantial stock price drop from its 52-week high tip the decision toward purchasing shares? Answering this question requires assessing whether its stock valuation is reasonable.

You can gauge this with the price-to-sales (P/S) ratio, which tells you how much you’re paying for every dollar of revenue the company earned during the trailing 12 months. This metric is commonly used to evaluate stocks for unprofitable businesses, such as Trump Media.

Data by YCharts. PS Ratio = price-to-sales ratio.

Over the past year, the company’s P/S multiple has undergone wild swings. Although it’s not at its peak at the time of this writing, it’s still exceedingly elevated, suggesting the stock is overpriced despite falling more than 50% from its high.

Given a pricy stock combined with significant risks, such as the potential for financial reporting errors and reliance on a single customer for nearly all its revenue, Trump Media shares are not a good investment at this time.

Perhaps the company deserves another look if its Truth+ and Truth.Fi products eventually generate sales. For now, there aren’t enough compelling reasons to buy Trump Media stock.

Buying low and selling high is what investing comes down to. Often, however, investors get spooked when prices are low and avoid struggling stocks, thinking that they are destined to go even lower. But when it comes to quality businesses, you should relish the opportunity to buy stocks when their prices are low as it can mean great returns later on.

Three stocks that are struggling today are Alphabet (GOOG 3.46%) (GOOGL 3.64%), Merck (MRK -2.14%), and Block (XYZ 0.38%). These stocks are trading near their 52-week lows. However, that shouldn’t deter you from buying them. Here’s why they can be fantastic investments to load up on right now.

Image source: Getty Images.

Alphabet

Shares of Alphabet have been sinking amid worries that a breakup of the company may be inevitable due to antitrust issues. Shares of Alphabet are down 16% since the start of the year, and the stock was 10% away from its 52-week low of $142.66.

It’s trading at just 17.8 times its trailing earnings, which is modest compared to the average stock on the S&P 500, where the average price-to-earnings (P/E) multiple is nearly 23.

Alphabet is trading at a discount given the uncertainty around its future, but I don’t believe the risk is significant enough to dissuade investors from owning it. A breakup of the business might even unlock value for investors in the long run. And while artificial intelligence may be changing the world of tech, Alphabet is at the forefront of that with its Gemini chatbot.

This is still a massive company that generated $112 billion in earnings over the trailing 12 months. And with high-powered assets such as Google Search and YouTube, it still looks like a fantastic long-term buy.

Merck

Pharma company Merck has been performing a bit worse than Alphabet this year with its shares down 22%. It hit a new 52-week low last week as investors grow concerned about the tariff risk facing the company.

Last month, the company released its first-quarter numbers, which showed a 2% decline in sales for the first three months of the year, with the top line coming in at $15.5 billion. But on top of the troubling top-line performance, Merck also said that it anticipated $200 million in costs as a result of tariffs this year. China is an important market for Merck, putting pressure on the stock recently as China has been hit heavily with tariffs. But the situation is also volatile. On Monday, the U.S. and China both agreed to significantly reduce tariff rates for the next 90 days.

If you’re a long-term investor, however, you shouldn’t worry too much about tariffs because in the grand scheme of things that is likely to be a temporary problem. With Merck stock trading at a P/E ratio of only 11.7, investors are well compensated for the risk and uncertainty that comes with the company. There’s a good margin of safety for investors who are worried about the tariff risk and the growth challenges Merck is encountering.

And the business may not be facing the considerable risks that its discounted valuation may suggest. The company is looking to develop a GLP-1 weight loss drug and is launching a new version of its popular cancer drug, Keytruda, in an effort to offset possible declines in revenue due to a loss of patent protection in the future. There’s reason to remain bullish on Merck’s growth prospects in the long run. And at a discounted price, the stock could be a steal of a deal.

Block

The most beaten-down stock on this list is Block. The fintech crypto stock declined by 34% this year. The company recently reported underwhelming earnings numbers, which sent its shares into even more of a tailspin.

Amid a downturn in the economy, including a potential recession, Block could face some challenges. But in the long run, it can still be in an excellent position to grow. Its point-of-sale devices enable merchants to easily accept credit card payments while its Cash App makes it easy for individuals to transfer money and Bitcoin.

The company has been bullish on Bitcoin and that is now a big part of its business, with Bitcoin-related revenue representing 40% of its top line. The downside is that this can introduce a lot of volatility to its bottom line. In the company’s first-quarter earnings, which ended on March 31, Block incurred a $93 million remeasurement loss related to Bitcoin. That line item weighed on its profits, but if you look at the company’s operating profit of $329 million, which came before that figure, then its earnings rose by 32%.

While there is some near-term risk related to macroeconomic conditions, Block still looks like a strong buy given its modest P/E multiple of 12. And even when factoring in its expected earnings (based on analyst estimates), its forward P/E is still less than 14. For buy-and-hold investors, this can be a solid stock to load up on right now as it should grow along with the economy.