Netflix(US:NFLX) The Motley Fool·2025-11-12 09:49Core Viewpoint - Retail investors will find it easier to buy shares of Netflix due to an upcoming 10-for-1 stock split, which will lower the price per share while maintaining the company's overall value [1][2][3]. Company Overview - Netflix operates the largest streaming platform globally, boasting over 300 million subscribers as of the end of 2024, significantly outpacing competitors like Disney+ and HBO Max [4]. - The company has achieved a remarkable stock performance, with a 103,000% increase since its IPO in 2002, and this will be its third stock split [4]. Financial Performance - Netflix reported a net income of $10.4 billion on $43.3 billion in revenue over the last four quarters, indicating strong profitability and the ability to invest heavily in content [5]. - Revenue growth accelerated to 17.2% in Q3 2025, marking the fastest growth rate in four years [6]. Growth Drivers - The introduction of a new subscription tier at $7.99 per month, supported by advertising, has been successful, accounting for over half of all signups in available markets [7][8]. - Netflix's advertising revenue doubled in 2024 and is projected to more than double again in 2025 [8]. - The company is also focusing on live events, which have attracted significant viewership, including exclusive boxing matches and NFL games [9]. Market Position - Netflix's current stock price is $1,135.09, with a market cap of $482 billion, and it has a P/E ratio of 46.1, slightly above its three-year average of 44 [10][11]. - Analysts project earnings growth to $32.30 per share in 2026, translating to a forward P/E ratio of 34 post-split [12]. Investment Considerations - A stock split may lead to increased buying interest from previously priced-out investors, but the stock's current valuation suggests that significant short-term gains may be limited [11]. - For long-term investors, holding Netflix stock for five years could yield better returns as initiatives like the advertising business mature [15].