Netflix’s Stock Split Marks a New Chapter — But Should Investors Buy In?
Netflix has reached another major milestone — and this time, the change is designed to bring more investors along for the journey. After enacting a 10-for-1 stock split, shares of Netflix (NFLX) began trading at a dramatically lower price, instantly making the stock more accessible to everyday investors, employees, and newer market participants. While stock splits don’t change a company’s fundamental value, they can meaningfully expand liquidity and attract fresh capital — especially in a market where retail traders play an increasingly important role.
The split comes at a pivotal time for Netflix. The company has delivered extraordinary long-term returns and continues to dominate the global streaming market. Yet recent earnings were overshadowed by a surprise tax expense, sparking a short-term selloff. With shares down following Q3 results, investors are now faced with a pressing question: Is Netflix still a smart buy after its 10-for-1 split, or has the stock’s incredible run already priced in future growth?
Let’s break down the numbers, the business fundamentals, Wall Street expectations, and whether NFLX remains undervalued despite its strong historical performance.
Netflix Completes 10-for-1 Stock Split, Lowering Its Price but Boosting Accessibility
On Monday, November 17, Netflix officially began trading on a split-adjusted basis after completing a 10-for-1 stock split. That means shareholders received nine additional shares for every one share they previously owned, lowering the stock price from around $1,112 to roughly $110.
Why Did Netflix Split Its Stock?
Netflix stated the primary purpose was to make shares more accessible to:
- Employees participating in stock option programs
- Retail investors priced out of the four-digit share price
- Younger investors who prefer lower nominal prices
And while the split itself doesn’t increase intrinsic value, it does:
Improve liquidity
Tighten bid-ask spreads
Boost trading volume
Make the stock feel “cheaper” psychologically
Historically, companies like Amazon, Apple, Tesla, Alphabet, and Nvidia saw noticeable retail inflows after major stock splits. Netflix appears set to benefit from the same trend.
Netflix’s Historical Returns Are Almost Unmatched in Modern Tech
Few tech stocks can match Netflix’s long-term performance. Even after the recent volatility, NFLX has delivered:
- 33% gains over the past year
- 130% gains over the past 5 years
- 973% gains over the past decade
- A staggering 4,440% return over the past 15 years
These numbers underscore Netflix’s ability to:
- Innovate consistently
- Expand globally
- Monetize content effectively
- Maintain subscriber loyalty
- Adapt its business model (ads, licensing, gaming, merchandise)
With a market cap of $471 billion, Netflix remains one of the largest and most influential entertainment companies in the world.
Why Did Netflix Stock Drop After Q3 Earnings? The Real Story Behind the Miss
Despite strong revenue growth, Netflix reported a surprise earnings miss in Q3 — not because of weak operations, but due to a one-time tax issue in Brazil.
The Numbers at a Glance
- Earnings per share: $5.87 (vs. $6.97 expected)
- Revenue: $11.51 billion (in line with expectations)
- Revenue growth: 17% year-over-year
- Net income: $2.55 billion (up from $2.36 billion YoY)
The real drag came from a Brazilian tax dispute involving a 10% charge on payments made to Netflix’s overseas operations. The company chose to book the expense immediately after concluding it would likely lose the case.
CFO Spencer Neumann emphasized that:
✔️ The tax is not specific to Netflix
✔️ It is not specific to streaming
✔️ It will not materially affect future results
Without the tax charge, Netflix would have exceeded its operating income and margin targets.
Investors punished the stock anyway — a reaction that might create opportunity for long-term buyers.
Netflix’s Core Business Remains Exceptionally Strong
While the earnings miss grabbed headlines, the underlying business continues to fire on all cylinders.
1. Membership Growth and Price Increases Fuel Revenue
Subscriber numbers continue climbing, helped by:
- The password-sharing crackdown
- Popular original content
- Global expansion
- Tailored pricing strategies for emerging markets
2. Advertising Is Becoming a Major Profit Engine
Netflix confirmed that:
✔️ It had its best quarter ever for ad sales
✔️ Ad revenue is on track to more than double this year
✔️ Advertisers continue shifting budgets to streaming
This pushes Netflix deeper into high-margin digital advertising — a market dominated by Google and Meta.
3. Content Still Drives the Brand — And 2026 Looks Huge
“KPop Demon Hunters” became Netflix’s most-watched film ever with 325+ million views.
Upcoming releases include:
- The final season of Stranger Things
- New prestige films from acclaimed directors
- Expanding anime, Korean dramas, and international hits
Netflix is also extending its hit franchises through:
- Hasbro and Mattel toy lines
- Gaming partnerships
- Brand collaborations
- Early moves into immersive content and live events
Netflix Provides Strong Guidance for Q4 and 2025
Netflix expects:
- 17% revenue growth in Q4 2025
- 16% YoY revenue growth for full-year 2025
- Operating margin: 29% (slightly lower due to the tax charge)
In short:
Operational strength remains intact, and long-term growth drivers are accelerating.
Is Netflix Stock Undervalued After Its Split? Here’s What Analysts Say
Wall Street analysts project significant growth ahead:
Revenue Forecast
- From $39B in 2024 → to $68B in 2029
Earnings Forecast
- Adjusted EPS rising to $5.43 (split-adjusted) by 2029
Valuation Analysis
For the past 5 years, Netflix has traded at:
- 36% average earnings growth
- 38x average forward P/E
If NFLX trades at a 25x forward P/E (more aligned with its projected 22x earnings growth):
- Fair value by late 2028 = ~$135.80
- That represents 20% upside from current levels
Analyst Ratings
Out of 48 analysts:
- 30 → Strong Buy
- 3 → Moderate Buy
- 14 → Hold
- 1 → Strong Sell
Most analysts remain bullish — even after the earnings miss.
Is Netflix Stock a Buy After Its 10-for-1 Split?
Netflix’s stock split does not change its underlying value — but it does open the door to a broader pool of retail and employee investors. Following a temporary dip driven by a one-time tax issue, Netflix still demonstrates exceptional long-term fundamentals:
- Strong subscriber growth
- Exploding ad revenue
- Global content dominance
- Partnerships expanding into toys, games & consumer products
- Solid revenue guidance for 2025
- A massive long-term market opportunity
With analysts projecting steady growth and valuing the stock higher than current levels, Netflix remains an attractive long-term play. The post-split price also makes NFLX far more approachable, potentially boosting demand and supporting upward momentum over time.
Bottom line:
Netflix continues to evolve beyond streaming into a diversified global entertainment ecosystem. For long-term investors, the recent dip — combined with the split — may offer an appealing entry point into one of the most powerful brands in modern media.