Investing

Prediction: Netflix Stock Could Be Next in Line for a Split After it Hits $1,100

Joey Frenette

Published: November 29, 2024 9:32 am

If there’s a mega-cap tech titan out there that’s overdue for a stock split, it’s Netflix (NASDAQ:NFLX). After an impressive parabolic surge, NFLX shares now find themselves flirting with $900 per share.

Undoubtedly, having the stock hit such a level would have been difficult to imagine two and a half years ago when the name bottomed out in the $180 range after suffering a devastating crash that saw over 74% in value wiped out.

With so much momentum behind the stock, which has more than tripled in two years (210% gain), perhaps the streaming giant was far more magnificent than we gave it credit for during its post-pandemic decline. Apart from retaining its streaming crown in the face of stiff industry competition by sticking with its unmatched content strategy, the company has demonstrated it’s more than willing to take a risk to transform itself in the new streaming era that includes live sporting events.

Key Points About This Article

• As Netflix live streaming helps power shares to $1,100, a stock split seems warranted.
• The Paul vs. Tyson fight shows the magnitude of demand to be had for live sports.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

The massive silver lining to the technical difficulties experienced during Paul vs. Tyson

Undoubtedly, jumping into less familiar territory (live streaming for Netflix) can cause one to fumble the ball in a big way. Most notably, the Jake Paul vs. Mike Tyson boxing match in November frustrated many fans when a profound number of viewers (around 107 million globally) caused buffering issues and outages. Perhaps Jake Paul put it best: the vast number of fans “broke the site.” Despite the horrid technical issues that plagued the event, however, shares reacted positively.

Simply put, demand was off the charts, and more similar live events may be key to boosting growth. Further, technical difficulties can be conquered. And if there’s a firm that can learn the ropes (no pun intended), it’s Netflix, which rose to glory by navigating far outside its comfort zone, making a few mistakes along the way. Such mistakes are more than forgivable, in my view, especially as Netflix learns and grows its new drivers.

Whether such new growth, like that experienced in live-streaming events, can help propel NFLX stock well into the quadruple-digits to warrant a split in the new year remains to be seen.

Either way, today’s share price, $872, and change per share seems quite hefty for a new retail investor who’s just starting out.

Of course, the advent of buying partial shares at some brokerages enables many to start a diversified portfolio, including shares of companies with very high prices, with a smaller investable sum. That said, stock splits are never a bad thing, especially in this environment where retail demand has grown to become quite lofty.

This bullish analyst sees NFLX stock soaring to $1,100. A split could follow shortly after.

Recently, Pivotal Research Group analyst Jeffrey Wlodarczak hiked his price target on NFLX stock to $1,100, citing technical shortcomings of the Paul vs. Tyson fight as nothing more than a “successful learning experience.” He’s right. If Tyson were to fight Logan Paul, the brother of Jake Paul, next, I’m sure we’ll all be tuning back in despite bad experiences with the quality of the previous stream.

Though it’s hard to tell what the next big live event will be, I think it’s safe to say that Netflix now knows the magnitude of what it faces. And with that, it’ll (hopefully) have the improvements in place to deliver a more seamless stream. Up ahead, Mr. Wlodarczak is also bullish on the potential to be had in sports. He’s right on the money. Netflix knows how to draw in viewers. And if it can support them, I’d bet they’d be that much more willing to not only stick with their subscriptions but pay higher prices.

Up ahead, Netflix has two NFL games to stream on Christmas Day. And shortly after that, some WWE Monday Night Raw will be up to the plate. Though I don’t expect either live event to draw in the crowds that Paul vs. Tyson did, I do find that each event will help strengthen Netflix’s live-streaming muscles.

Who knows? Perhaps they’ll grow to become strong enough to support more than 100 million concurrent viewers come the next big live fight event. Whether it features Mike Tyson and one of the Pauls remains to be seen.

Either way, strength in live-streaming sports is real. And as Netflix stock makes a move to $1,100, one has to think a split will be penciled in at some point.