Netflix Inc. NFLX has witnessed its stock price soar beyond $900, sparking speculation about a potential stock split. This surge aligns with a broader market rally, particularly in Big Tech, driven by advancements in AI software and chips.
What Happened: Netflix’s shares have increased more than fivefold since hitting a low in 2022. The S&P 500 has risen 70% since the bear market bottomed in October 2022. Companies like Nvidia Corp. NVDA and Deckers Outdoor Corp. DECK have already executed stock splits this year, Barron’s reported on Friday.
Ken Mahoney of Mahoney Asset Management commented, “Once stocks are worth way into the high hundreds of dollars per share range, a lot of people get in their mind that a stock split could be coming.”
"It wouldn't surprise us if Netflix followed suit within the next few announcing earnings."
A stock split can attract more investors by making shares more affordable, potentially boosting market value.
Netflix has yet to respond to Benzinga’s queries.
Netflix’s growth, particularly outside the U.S., and increased profit margins have contributed to its rising stock price. Analysts anticipate further revenue growth through higher international subscription prices and advertising. However, Netflix’s high valuation could deter some investors if earnings expectations are not met.
Why It Matters: The recent surge in Netflix’s stock price is not an isolated event. Jim Cramer recently expressed strong buying conviction for Netflix as its shares traded near $934. This comes amid broader tech market strength and a recommendation from JPMorgan analyst Doug Anmuth, who raised his price target on Netflix to $1,010 from $850. Anmuth cited robust subscriber growth and expanding ad revenue as key factors.
Netflix’s recent milestone, the Jake Paul vs. Mike Tyson boxing match, became the most-streamed sporting event ever, with 60 million households watching live. This achievement underscores the platform’s growing influence in the streaming industry and its ability to attract a massive audience.
Price Action: According to Benzinga Pro, Netflix was trading slightly higher at $204.60 on Friday during pre-market hours after previously closing at $203.68.
Meanwhile, as per the three most-recent analyst ratings, released by JP Morgan, Citigroup, and Canaccord Genuity the average price target of Netflix is $956.67, with an implied 3.48% upside for the company.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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