Trump Media stock is down 70% since going public. One expert says its $3 billion valuation is still 'unjustifiable.'

• Trump Media shares have plunged 70% since going public in March.
• The company is still carrying a market value of roughly $3 billion.
• "The numbers don't jive," a chief global strategist said.

Shares of Trump Media have plunged 70% since the company went public in March. Even after that sell-off, it's carrying a market value of roughly $3 billion, a figure one expert says is still too high.

"According to Bloomberg data they had sales of $837,000 last quarter and a net loss of $16.4 million. The numbers don't jive," Jay Woods, chief global strategist at Freedom Capital Markets, told Business Insider.

He added that its current valuation "seems unjustifiable."

One traditional valuation metric — price-to-sales ratio — is currently at 1,864 times, with the company generating revenue of less than $2 million in the trailing twelve months.

In addition to the eye-watering valuation, Woods said Truth Social's growth has limited upside due to its political nature.

"They struggle with user retention and growth and the upside seems limited — especially if he loses the election," Woods said. "His relevance and age will play a role as will the fact that this never became the social playground for anything outside of politics."

Another lingering issue weighing down Truth Social stock is Trump's increasingly frequent use of its biggest competitor, X, formerly known as Twitter.

There's also the recent end of a lock-up period for insiders to sell shares, which could put further pressure on shares.

The offloading has already begun, with United Atlantic Ventures — an investment partnership run by two former contestants of Trump's "Apprentice" reality show — dumping nearly their entire 11-million-share stake in the company for proceeds exceeding $100 million.

There's also the risk that Trump himself will decide to sell some or all of his 57% ownership stake, although he's previously said he won't do so. But there's no guarantee he won't change his mind.

"If there was to be a fire sale by its number one shareholder, that could cause a panic with other insiders holding shares and lead to a major leg lower," Woods said.