Netflix (NFLX) Stock: Company Executes 10-for-1 Split as Ad Business Booms

Table of Contents

TLDR

Netflix’s 10-for-1 stock split commences November 17, reducing share price from over $1,000 to accessible levels
Third-quarter 2025 revenue climbed 17.2% year-over-year with Q4 guidance projecting continued 17% growth
The advertising business, launched under three years ago, will more than double its revenue in 2025
Operating margin expanded to 27% in 2024 from 16% in 2023, with 29% projected for 2025
Stock trades at forward P/E of 35 with market capitalization of $471.3 billion

Netflix launches split-adjusted trading November 17. The 10-for-1 split is the company’s first in a decade.

The streaming platform’s shares climbed past $1,000 before the split. This price level prompted management to make shares more accessible.

Company officials cite accessibility as the primary reason. Employee stock option participants benefit most from the lower share price.

The split is cosmetic in nature. Each shareholder receives 10 shares for every one held before the adjustment.

Stock volatility has been extreme recently. Shares dipped below $200 during 2022 before recovering to current levels.

Q3 revenue increased 17.2% compared to last year. This outpaces the 15.9% growth rate from Q2 2025.

Management forecasts another 17% revenue jump for Q4. The acceleration continues a trend that started earlier this year.

Full-year 2024 revenue grew 15.7%. The recent quarters show improving momentum across the business.

Three factors drive the revenue gains. Membership growth, price increases, and advertising all contribute to the uptick.

The company’s market value reached $471.3 billion. Shares have gained 25.42% year-to-date.

Netflix entered advertising less than three years ago. The business unit now scales rapidly despite its recent launch.

The company expects advertising revenue to more than double in 2025. Management’s confidence in the ad business continues growing.

This revenue stream diversifies Netflix’s income sources. The company can grow without relying entirely on subscriber additions.

Advertising offers attractive profit margins. As the business scales, it should enhance overall profitability over time.

Operating margin reached 27% in 2024. This represents a major improvement from 16% in 2023.

The company targets 29% operating margin for 2025. This expansion occurs even before ads become a major revenue contributor.

The stock’s P/E ratio exceeds 47. However, the forward P/E ratio of 35 better reflects growth prospects.

The forward metric accounts for expected earnings expansion. Double-digit revenue growth and margin improvements drive this outlook.

Gross margin stands at 48.02%. Netflix doesn’t offer dividend payments to investors.

The 52-week range extends from $80.93 to $134.12. Daily trading volume averages 3.6 million shares.

Streaming competition remains intense. Major tech companies invest billions in content creation and licensing.

Netflix’s market leadership provides advantages. The subscriber base and content library create competitive moats.

Price adjustments continue supporting revenue growth. The company balances pricing with subscriber retention effectively.

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