1 Stock-Split Stock to Buy Before It Soars 22%, According to Wall Street

Core Viewpoint - Netflix's recent stock performance has been volatile, with a significant sell-off following disappointing third-quarter earnings, but analysts remain optimistic about its long-term potential, especially with a projected price target indicating a 22.3% upside from current levels [2][4]. Financial Performance - Netflix reported third-quarter revenue of $11.5 billion, reflecting a 17.2% increase year-over-year [8]. - The company experienced strong free cash flow of $2.66 billion, which is 21.2% higher than the same quarter last year [8]. - A tax dispute with Brazilian authorities resulted in an additional $619 million in expenses, impacting the bottom line [5]. Stock Split Impact - Netflix announced a 10-for-1 stock split, which is expected to make shares more accessible to average investors, reducing the price per share from approximately $1,100 to about $110 [6]. - Stock splits often signal management's confidence in the company's future performance, potentially providing a temporary boost to stock prices [7]. Advertising Growth - Netflix's advertising business is in its early stages but showed significant progress, with the third quarter being its best ever for ad sales [9][10]. - The ad business, while currently a small percentage of total sales, is expected to contribute to revenue growth as it scales [11]. Long-term Outlook - Despite recent challenges, Netflix is still considered a strong player in the streaming industry, with potential for continued membership growth and revenue increases from its advertising segment [11][12].