Forecast: These Stance Out as the Most Notable (and Eagerly Awaited) Stock Divisions for 2025
Prices hold significant sway over consumers' minds. That's the reason retailers frequently offer 3-for-1 deals, push "buy one get one free" promotions, and adjust prices to end in 99 cents.
Moreover, a costly stock can put off an investor. Consider the choice between five shares of a $100 stock or half a share worth $500. I'd wager most would choose the former.
Thus, let's scrutinize a handful of costly stocks investors hope will carry out a stock split by 2025.
Experian
Just a year ago, I compiled an analogous list of projected stock splits. At that time, Experian (EXPN -1.23%) headed the list. Although my other picks (Nvidia and Chipotle Mexican Grill) did split shares in 2024, Experian did not. Nevertheless, its shares have significantly surged, around 80%, as of this writing.
However, this leaves Experian shares priced beyond $2,000 a share. The company's last stock split occurred around two decades ago. Currently, the company could execute a substantial split, possibly a 20-to-1, reducing its share price to around $100 a share.
Regardless, investors should keep a close eye on this credit rating titan. Its asset-light business model ensures high profitability, with gross margins approaching 80% and operating margins surpassing 43%. Moreover, Experian has substantially increased its revenue, from $1.2 billion to $1.7 billion, over the last five years, representing an annual growth rate of 8%.
In other words, this under-the-radar financial staple is a robust business, split or not.
Netflix
A while back, a stock split seemed improbable for Netflix (NFLX -1.80%). Its shares plummeted about 75% in the first half of 2022, reaching a nadir near $166.
But since then, the company and its stock have experienced a remarkable comeback. Its shares recently surpassed $900, stirring questions about a possible stock split for the first time since 2015. While I believe Netflix will announce a split in 2025, perhaps a 10-to-1, it remains a noteworthy investment.
In recent months, Netflix added an advertising tier, while also cracking down on password sharing, pushing its operating margin to an all-time high of 25.7%. Furthermore, Netflix has emerged victorious in the streaming wars, accounting for 7.7% of all streaming hours, trailing only YouTube (10.8%). Other key Netflix competitors like Amazon's Prime Video (3.7%), Hulu (2.9%), and Disney (1.9%) lag behind.
As a consequence, Netflix's share price could continue escalating in 2025, making a stock split even more probable.
Tesla
The past year was mostly uneventful for Tesla (TSLA -4.95%) shares -- until Election Day. Post-election, Tesla shares experienced a meteoric rise, thanks to Elon Musk's close ties to the incoming president.
As of now, Tesla shares are priced over $450 apiece, putting them in a prime position for a potential stock split in 2025. Tesla's most recent stock split, a 3-for-1, occurred in 2022. Given that the stock split was first announced in June 2022, when shares were trading around $700, it's conceivable Tesla might consider a 2-for-1 split if shares hit and hold the $500 level in 2025.
Investors may want to consider Tesla for multiple reasons. Undoubtedly, the stock gained a boost due to Musk's ties to the new president, but there are other elements, too. Tesla appears close to implementing some form of autonomous driving and robotaxis in Austin, Texas. This indicates the company might unlock fresh value propositions that Tesla investors have long anticipated.
In addition, certain analysts are enthused by the company's humanoid robot, Optimus. Given recent advancements in AI technology, humanoid robots might soon become ubiquitous in various labor-intensive jobs, presenting another potentially lucrative market for Tesla to explore in the near future.
Tesla stock is once again approaching levels at which a stock split seems viable. Moreover, the company seems to be operating at full steam.
Investing in Experian might be appealing despite its high share price, as a potential stock split could reduce the cost per share. With a revenue increase of 8% annually over the last five years and high profitability, Experian remains an attractive investment option.
Finance plays a significant role in the consideration of a stock split, as a lower share price makes the stock more accessible to a larger pool of investors, potentially increasing demand and driving up the price.
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