Streaming giant Netflix will conduct a stock split (split) on November 14 after a powerful rally in 2025, during which the price of securities in February for the first time exceeded $1000. Netflix is now the 12th most valuable stock in the Morningstar US Market Index.
Split will be held in proportion of 10 for one share. It means that after trades closing next Friday shareholders will get nine additional shares for each security, which were in their portfolio on the date of register fixation - November 10. Trades in shares taking into account the split will start on November 17.
Netflix has done two splits before, a seven-for-one split in 2015 and a two-for-one split in 2004.
What it means for investors
Morningstar senior analyst Matthew Dolgin said Netflix's strong brand makes the stock attractive to private investors, but the high price may have deterred some buyers. "I'm going to assume that the high absolute share price has led to a more pronounced institutional bias in the ownership structure than it could have," he said.
After the split, the price per share will drop from about $1100 to $110, with an increase in the total number of shares outstanding but no change in the overall market value of the company, Morningstar explains.
Dolgin emphasizes that the split will not change Netflix's fundamentals. Its fair value estimate will be restated from $770 to $77 per share, a purely mechanical adjustment to the 10-for-one ratio.
The analyst also admits that the stock split will have a positive impact on the quotations. "I expect the split will push the shares up as they become more accessible to retail investors - especially through call options, which will also increase demand," Dolgin explained. However, in the long term, he notes, the securities will return to previous prices "driven by fundamentals."
"We continue to believe the stock is overvalued and expect it to decline," Dolgin said. He recalls that Netflix is still trading at a premium of about 45% to fair value.
In trading on November 7, the securities of the streaming service cheapened by 0.6% amid a broad sell-off on the stock market. Since the beginning of the year, shares have risen by more than 22%. According to MarketWatch, of the 53 analysts tracking Netflix shares, 38 recommend buying them, 13 recommend holding, and only two recommend selling. The Wall Street consensus price target suggests the stock is up 24.5% to $1366.5.
This article was AI-translated and verified by a human editor
