Netflix Stock Just Split. What It Means as Streaming War Heats Up.
Netflix’s growth stock has been on a remarkable run. Since the company last executed a stock split in 2015, Netflix (NFLX) shares have skyrocketed thanks to powerful business growth and rising investor confidence in the company’s long-term strategy. This momentum pushed the stock well above $1,000 per share, making a split increasingly reasonable. Recently, Netflix announced a 10-for-1 stock split to improve accessibility, especially for employees utilizing the company’s stock option program.
While it’s mostly an accounting change, the split represents a major moment for shareholders. After all, Netflix stock has seen extreme volatility in recent years — trading below $200 in 2022, then rebounding strongly to today’s impressive levels.
With shares set to trade on a split-adjusted basis, many investors are asking a key question: Is Netflix stock still a buy?
Netflix’s Strong Momentum: Revenue and Membership Growth
Netflix continues to post undeniable momentum. In the third quarter, revenue grew 17.2% year over year, accelerating from both Q2 (15.9%) and full-year 2024 (15.7%). Management expects another quarter of 17% growth, signaling durable reacceleration heading into year-end.
A major driver behind this growth is Netflix’s expanding advertising business. Though still less than three years old and small compared to the subscription segment, advertising revenue is scaling rapidly.
“We have a solid foundation and are increasingly confident in the outlook for our ads business… we are now on track to more than double our ads revenue in 2025,” management said.
This matters because advertising gives Netflix a new, high-margin growth engine that doesn’t depend solely on new subscribers or price increases. Over time, ads should significantly lift profitability.
Even without ads becoming dominant yet, Netflix is already expanding margins. The company posted a 27% operating margin in 2024, up from 16% in 2023, and expects 29% in 2025.
Valuation After the Stock Split
A stock split does not change Netflix’s true value — it simply increases the number of outstanding shares while reducing the price per share proportionally. Investors shouldn’t buy the stock because of the split; it’s a cosmetic change.
But with the stock’s big multi-year rally, valuation matters.
Netflix currently trades at a P/E ratio above 47. While that appears high, expected earnings growth tells a fuller story. A better metric is the forward P/E ratio, which sits around 35 — far more reasonable given Netflix’s market leadership, revenue acceleration, margin expansion, and fast-growing advertising segment.
The ad business especially could become a powerful earnings catalyst over the next 5–10 years.
Should You Buy Netflix Stock After the Split?
In short, Netflix still looks like a buy. The business is performing exceptionally well, margins are rising, and new revenue streams like advertising are scaling quickly.
That said, investors should be mindful of risks:
Streaming competition remains intense, especially from deep-pocketed tech giants.
Content spending remains high and could pressure margins if growth slows.
Position sizing should be reasonable given the competitive landscape.
Still, with strong fundamentals and a promising long-term growth runway, Netflix remains an attractive option for investors willing to monitor the evolving streaming market.
