Netflix (NASDAQ: NFLX) has been one of the great long-term success stories of modern investing. Over the past 15 years, its stock has delivered an average annual return of nearly 29%, trouncing the S&P 500’s 14.6% total return in the same period. And now, the streaming giant is setting up its next chapter — one that could make the stock far more approachable for everyday investors.
After markets closed on Thursday, October 30, Netflix announced that its board of directors approved a 10-for-1 stock split, set to take effect when trading opens on Monday, November 17.
This marks Netflix’s third stock split since going public — following a 2-for-1 split in 2004 and a 7-for-1 split in 2015. According to the company’s press release, “The purpose of the stock split is to reset the market price of the Company’s common stock to a range that will be more accessible to employees who participate in the Company’s stock option program.”
Why Netflix Is Splitting Its Stock
Netflix shares closed at $1,089 on Thursday — a lofty price tag that makes it challenging for smaller investors or employees to buy in, especially those without access to fractional-share trading.
Once the 10-for-1 split takes effect, each existing share will be divided into 10, and the stock’s price will drop proportionally to around $109 per share (based on current levels). Importantly, this doesn’t change the company’s valuation or investors’ proportional ownership — it’s essentially like breaking a $10 bill into ten $1 bills.
Stock splits are often viewed as a signal of confidence from management. They suggest that leadership believes the company has room to grow and that making shares more affordable can boost trading activity and employee participation.
Netflix isn’t the only company using this strategy to make shares more accessible. O’Reilly Automotive (ORLY) completed a 15-for-1 split earlier this year, citing a similar goal of keeping its shares within reach of employees and retail investors. Financial services firm Interactive Brokers (IBKR) also executed a stock split recently for the same reason.
The Fundamentals Stay the Same — But Interest May Rise
It’s worth noting that a stock split doesn’t alter the company’s underlying business, revenue, or earnings. What it does change is perception. Lower share prices tend to attract more retail investors, and greater liquidity can sometimes lead to improved trading volume and stability.
In Netflix’s case, that could translate into renewed enthusiasm — especially among its global base of subscribers who may want a piece of the brand they already know and love.
Recent Earnings Bump — But Analysts Stay Optimistic
Despite this good news, Netflix’s stock recently took a short-term dip. The company’s third-quarter earnings missed Wall Street expectations, largely due to expenses tied to a tax dispute with Brazilian authorities. The results triggered a brief sell-off, but analysts remain largely unfazed.
“Netflix’s Q3 results and Q4 guidance underwhelmed investors after several quarters of phenomenal results,” said Alicia Reese, an analyst at Wedbush Securities. “But we think Netflix is positioning for substantial growth in global advertising — and that should not be overlooked.”
Reese pointed out that subscriber growth remains strong, even after recent price increases. She also noted that the company continues to expand its advertising business — a segment that could become a major profit driver by 2026, with significant upside beyond 2027.
Wedbush maintains an Outperform (Buy) rating on Netflix, with a price target of $1,400, representing an upside potential of about 28% from current levels.
Wall Street’s Consensus: Still a Buy
Reese isn’t alone in her bullish stance. According to S&P Global Market Intelligence, out of 49 analysts covering Netflix:
- 25 rate it as a Strong Buy
- 8 have it as a Buy
- 14 call it a Hold
- 2 rate it as a Strong Sell
That mix gives Netflix a consensus “Buy” rating, suggesting that most experts see more room for growth — particularly as Netflix strengthens its advertising revenue streams, adds more live content, and continues to expand globally.
What This Means for Investors
For long-term investors, Netflix’s stock split might not change the fundamentals, but it does signal a few things:
- The company remains confident in its trajectory.
- Shares will become more affordable and accessible to a broader base of investors.
- It could boost employee participation in Netflix’s stock option programs, aligning incentives company-wide.
And for fans of the brand who’ve watched from the sidelines, November 17 could mark an opportune time to finally join the story — at a more comfortable entry price.
