Before there was even a wisp of a streaming war, there was Netflix (NASDAQ:NFLX). The company has pioneered on-demand watching, providing a seemingly limitless array of viewing options over the years.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
The company’s share price has surged more than 100,000% since its IPO over two decades ago – the very definition of a millionaire maker.
NFLX’s share price currently floats above the $1,100 mark. In an effort to make its share price more accessible to smaller investors, the company has announced a 10-to-1 stock split that will unfold later this month.
Should investors look to load up on NFLX before the split? Investor Anthony Di Pizio believes that Netflix could be a solid purchase, but only for those who have a high degree of patience.
“Short-term investors might want to stay on the sidelines, whereas their long-term counterparts could do very well in the coming years,” explains the investor.
Di Pizio points out that Netflix has turned into a “financial powerhouse,” with $11.5 billion in Q3 revenues representing a jump of 17.2% year-over-year. Not only was this the company’s highest revenue growth rate in over four years, but Netflix is churning out profits as well.
Indeed, the company’s $10.4 billion in net income over the last twelve months provides Netflix with the ability to both develop its own content and license others, thereby “solidifying its dominance” in the field.
And yet, Di Pizio also notes that NFLX’s valuation is far from cheap, with a Price-to-Earnings ratio in the mid-40s – well above the mid-30s of the Nasdaq-100 index.
“Netflix is considerably more expensive than many of its peers in the tech and tech-adjacent industries, so short-term investors expecting big gains over the next few months might be left disappointed,” adds Di Pizio.
However, those who can stick around for a while could see their fortunes increase, explains the investor. The company’s more affordable, ad-supported subscription option helped Netflix double advertising revenues in 2024, a feat the company appears on the way to repeating in 2025. In addition, the company’s success with live programming – including sports events – is drawing millions of viewers.
“In summary, whether investors should buy Netflix ahead of Nov. 17 – which is the first day of trading after the 10-for-1 split – depends entirely on their time horizon,” concludes Di Pizio. (To watch Anthony Di Pizio’s track record, click here)
Overall, Wall Street is feeling pretty good about NFLX. With 26 Buys, 7 Holds, and 1 Sell, NFLX enjoys a Moderate Buy consensus rating. Its 12-month average price target of $1,398.59 (before the split) would yield gains approaching 30%. (See NFLX stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.