The Motley Fool·2026-02-01 07:29Core Viewpoint - Stock splits are gaining popularity again, historically indicating strong company performance and making shares more affordable for investors [1][2] Group 1: Stock Split Overview - Stock splits are often associated with companies that have demonstrated strong business and financial results, leading to increased stock prices that may become inaccessible to average investors [2] - Historically, stock-split stocks have generated average returns of 25% in the year following the announcement, compared to 12% for the S&P 500 [3] Group 2: Netflix Analysis - Netflix has experienced significant volatility but has gained 810% over the past decade, prompting a 10-for-1 stock split [5] - The stock has declined 38% from its peak due to concerns over a proposed acquisition, but Netflix has a history of avoiding overpriced deals [6] - In Q4, Netflix reported record revenue of $12 billion, a 17% year-over-year increase, with diluted EPS of $0.56, up 30% [7] - Analysts are optimistic about Netflix, with 68% rating it a buy or strong buy, and an average price target of $112, indicating a 34% upside [9] - BMO Capital's price target of $135 suggests a potential upside of 62%, supported by strong results and growing ad revenue [10][11] Group 3: ServiceNow Analysis - ServiceNow's stock has dropped 48% over the past year, leading to a 5-for-1 stock split, despite previously trading above $800 [12] - The company provides cloud-based software tools and has shown resilience against fears of disruption from AI, with Q4 revenue of $3.53 billion, up 21% [14] - ServiceNow's remaining performance obligation (RPO) increased 27% to $24.3 billion, indicating potential future growth [14] - Analysts remain bullish, with 91% rating it a buy or strong buy, and an average price target of $200, suggesting a 72% upside [16] - Citizens analyst's price target of $260 indicates a potential upside of 123%, citing the company's attractive financial profile [17][18]