Key Points
- Stock splits have gained traction recently, suggesting strong financial performance.
- Notable companies like Netflix and ServiceNow have demonstrated consistent growth.
- Stock splits often lead to average gains of 25% in the year following the announcement, outpacing the S&P 500’s 12% gains.
Netflix (NASDAQ: NFLX) recently completed a 10-for-1 stock split after a decade-long price increase of 690%. Currently trading 32% below its 2025 peak, its Q3 2023 revenue reached $11.5 billion—a 17% year-over-year increase. Analysts project a potential upside of 39% with an average price target of $126, while Jefferies’ analyst James Heaney estimates a higher target of $134, indicating a possible 48% increase.
ServiceNow (NYSE: NOW) executed a 5-for-1 stock split in December and has seen its stock rise over 800% in the past decade, despite a recent decline of 28%. In Q3 2023, the company’s revenue increased by 22% to $3.4 billion, with adjusted EPS climbing by 29%. Analysts rate the stock highly, with 91% recommending a buy and an average price target of $223, suggesting potential upside of 53%; however, Morgan Stanley forecasts an even higher target of $263, implying an 80% potential increase.
