Meet the Newest Stock-Split Stock in the S&P 500. It's Soared 80,730% Since Its IPO, and It's a Buy Heading into 2026, According to Wall Street.

Netflix completed a 10-for-1 stock split and reported continued top-line momentum—Q3 revenue $11.5bn (+17%) and adjusted EPS $6.87 (+27%) with Q4 guidance of $11.96bn revenue and $5.45 EPS—while announcing a planned acquisition of Warner Bros. Discovery assets for $82.7bn ($27.75/share) that would add the Warner studios and HBO/HBO Max and is approved by both boards but subject to regulatory review and a rival $30/share hostile bid from Paramount Skydance. Management says it will monetize the assets through licensing, bundling and targeted use of Netflix’s recommendation data, a strategy that could be transformational for content distribution and monetization; however, analysts flag price and integration risk. Wall Street remains broadly bullish (67% buy/strong buy) with an average $129 price target (~34% upside) and Netflix trading at about 39x earnings—below its three‑year average multiple—highlighting upside expectations tempered by regulatory and execution risk.

Analysis

Netflix completed a 10-for-1 forward stock split in November and reported third-quarter revenue of $11.5 billion, up 17% year-over-year, with adjusted EPS of $6.87, up 27%. Management guides fourth-quarter revenue of $11.96 billion and EPS of $5.45 (a 28% increase), signaling continued top-line momentum and margin expansion. The company’s long-run outperformance is noted in the article (80,730% since the 2002 IPO and 687% over the past 10 years versus 233% for the S&P 500).

Netflix announced plans to acquire select Warner Bros. Discovery assets for $82.7 billion ($27.75 per share), including the film and television studios and HBO/HBO Max; both boards have approved the deal but it is subject to regulatory approval and faces a competing $30-per-share hostile bid from Paramount Skydance. Management expects to monetize the library through licensing, bundling and targeted use of Netflix’s recommendation algorithm to drive ARPU and retention, while analysts caution about the purchase price and integration risk. Market positioning remains moderately positive—67% of 42 analysts rate the stock buy/strong buy and the average target of $129 implies ~34% upside.

Netflix trades at about 39x earnings, below its three-year average multiple of 45x, which the article frames as making the current valuation more attractive versus its recent history; however, regulatory review, a rival bid and execution on integration are material near-term catalysts and risks that could alter the investment thesis.

Key Decisions for Investors

• Consider maintaining or modestly increasing exposure to Netflix given strong Q3 results, constructive Q4 guidance and a majority analyst Buy consensus implying ~34% upside, while keeping position sizes calibrated for event risk
• Hedge or reduce net exposure ahead of regulatory decisions and potential bid contests—monitor filings, shareholder vote timelines and material changes to deal terms and consider protective options if position size is large
• Reassess conviction if Paramount’s $30 bid gains traction or regulators impose significant remedies; valuation at ~39x earnings is below recent averages but still reflects a premium that must be justified by successful integration and monetization
• Track post-announcement KPIs (ARPU, licensing revenue, subscriber retention and integration costs) closely after any deal progress, as these metrics will determine whether acquisition synergies materialize and support the premium paid