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Stock Splits and Company Performance Overview
Stock splits are making a comeback, with companies like Netflix (NASDAQ: NFLX) and ServiceNow (NYSE: NOW) leading the trend. Historically, firms that implement stock splits show an average price increase of 25% in the year following the announcement, compared to average gains of 12% for the S&P 500, according to Bank of America analyst Jared Woodard.
Netflix recently executed a 10-for-1 stock split, enjoying a 23% gain this year and a 755% increase over the past decade. The company’s Q3 revenue reached $11.5 billion (up 17% year-over-year), projected to rise to $11.96 billion in Q4. Wall Street rates 69% of Netflix’s stock as a buy, with a price target suggesting a potential 27% upside.
ServiceNow, despite a recent 24% decline in stock price, reported Q3 revenues of $3.4 billion (up 22%), with an earnings per share of $4.86 (up 29%). Wall Street analysts project a price target of approximately $1,155 for ServiceNow, indicating a 44% upside, with one analyst notably predicting a 64% upside to $1,315.
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