Historical trends suggest that Netflix’s stock split will push its share price higher over the next year; Wall Street analysts concur.
Netflix (NFLX 2.30%) held its initial public offering (IPO) in May 2002. Its share price has since climbed 88,900%, prompting the streaming company to split its stock three times, as follows:
- Netflix completed a 2-for-1 stock split in February 2004
- Netflix completed a 7-for-1 stock split in July 2015.
- Netflix completed a 10-for-1 stock split in November 2025.
Investors who bought a single share of Netflix at the split-adjusted IPO price of about $0.12 per share would now own 140 shares, each worth $107 today. That tremendous price appreciation was driven by strong sales growth, which itself was a product of subscriber growth fueled by an expanding library of quality programming.
A repeat performance over the next two decades is highly unlikely. But Netflix has a market value of $443 billion, which leaves room for upside. Here’s what investors should know.
Image source: Getty Images.
History says Netflix stock could soar 27% by October 2026
Research from Bank of America shows the average stock has beat the S&P 500 (^GSPC +0.91%) by 13.5 percentage points during the 12-month period following a stock split announcement. The most obvious explanation is that stock splits make shares and options contracts more affordable, unlocking demand among retail investors who had previously been priced out.
However, some investors also interpret stock splits as indirect indicators of quality. Forward stock splits are only necessary after substantial and sustained share price appreciation, and that rarely happens to companies that lack a durable competitive advantage. So, stock splits can theoretically be seen as indicators of high-quality businesses.
Here’s what history says about Netflix: The company announced its 10-for-1 split on Oct. 30, when the stock traded at an adjusted $108.90 per share. Since 1980, the average stock has returned 25.4% during the 12-month period following a stock split announcement, according to Bank of America. Netflix will trade at $136 per share by October 2026 if its performance matches the historical average, implying 27% upside from its current share price of $106.
Today’s Change
(-2.30%) $-2.46
Current Price
$104.51
Key Data Points
Market Cap
$442B
Day’s Range
$103.82 – $106.28
52wk Range
$82.11 – $134.12
Volume
1.2M
Avg Vol
37M
Gross Margin
48.02%
Dividend Yield
N/A
Wall Street says Netflix stock could soar 30% in the next year
Netflix is the leading streaming service. Last year, it was not only the most downloaded streaming application, but also the one with the most monthly active users, according to data from Sensor Tower. In a recent note to clients, Morningstar analyst Matthew Dolgin highlighted two important competitive advantages that should help the company sustain its dominance: “First, it has no legacy assets that are losing value as society transitions to new ways of consuming video entertainment at home, allowing it to put its full effort behind its core streaming offering. Second, it was the pioneer in the industry, providing it a big head start in accumulating subscribers and moving past the huge initial cash burn.”
Netflix has reached the point where its business benefits from a virtuous flywheel. With more subscribers than its competitors, the company has more resources and data to guide content development decisions. That should translate into a steady flow of quality shows and movies, which should help the company maintain its leadership position.
Netflix reported somewhat mixed financial results in the third quarter, missing estimates on the bottom line. Revenue increased 17% to $11.5 billion, driven by strong growth across every geographic region. But GAAP net income increased only 8% to $2.5 billion as the company recorded an unanticipated $619 million expense related to an ongoing dispute with Brazilian tax authorities.
Without that expense, Netflix’s net income would have increased 34%, beating Wall Street’s consensus estimate. Yet, shares sold off sharply after the report, and the stock is currently 14% below its record high. I believe that dip presents an opportunity for long-term investors and Wall Street analysts generally share that opinion. Among 52 analysts, Netflix has a median target price of $139 per share, implying 30% upside from its current price of $107.