Upcoming Stock Separations: Could These Two Unyielding Shares Be the Next Contenders?
In the realm of stock trading, platforms often allow for fractional share purchases, ensuring even the priciest stocks are still accessible for investors. Yet, stock splits still create a stir, as seen in recent years. Two companies potentially in the spotlight for a potential split are Netflix and Booking Holdings.
1. Netflix
Netflix has been exceeding expectations with its business transformations, resulting in impressive financial results. In the latest quarter, Netflix surpassed analyst expectations, sending its stock soaring. The streaming giant reported a 16% year-over-year revenue increase to $10.2 billion, with earnings per share more than doubling to $4.27. The company amassed 301.63 million paid subscriptions, a 16% rise from the previous year.
As of now, Netflix shares are trading close to $979. The last time it split its stock was in 2015, with shares priced under $700. Given the company's stellar performance and high stock price, a potential split might be in the cards.
Netflix boasts a massive addressable market estimated to be around $650 billion, with the company currently capturing only 6%. The streaming giant is making headway in regions, occupying less than 10% of television viewing time. Despite increasing competition, Netflix remains the leader. Its business also benefits from a network effect, generating profitable data and content from its growing subscriber base.
As for its financials, Netflix has been consistently delivering revenue, subscriber, and earnings growth. Thus, its share price should continue to trend positively in the long run, making it an enticing pick for growth-oriented investors.
2. Booking Holdings
Booking Holdings is a dominant force in the travel industry, providing flights, hotel accommodations, rentals, transportation, and activities. Despite a slow start during the early pandemic years, the company has rebounded remarkably and has consistently posted strong financial results. Currently, the stock is trading at a hefty $4,693 per share.
For the average investor, buying a single share of this corporation may be out of reach. However, Booking Holdings has a history of conducting stock splits, most recently in 2003. Given the stock's current high price, a potential split could make it more accessible to those looking to invest in the company.
Booking Holdings reaps the benefits of its extensive network, attracting more hotels, vacation rentals, and car rental companies to its platform, boosting its attractiveness to travelers. Despite competition from brands like Airbnb, Booking Holdings remains the market leader, owning famous brands like Priceline and Kayak.
The company has also been enhancing its platform with AI initiatives, adding features that further boost its value. With plenty of long-term growth potential in the travel industry, Booking Holdings should continue to perform well. Therefore, looking for a stock split might not be a necessary condition for investors looking to join the investment bandwagon.
No definitive evidence from the sources suggests that Booking Holdings is planning a stock split. However, the company's historical tendency to conduct splits and its favorable growth prospects make it a potential candidate.
- Given the impressive financial performance of Netflix and its current high share price, investors might consider the possibility of a potential stock split to make the shares more accessible, allowing even those with limited funds to invest in the company.
- The high price of Booking Holdings' shares may deter some potential investors. However, its history of conducting stock splits, like the one in 2003, indicates that the company might consider a split again in the future to make its shares more affordable, making it an attractive option for investors looking to invest in the travel industry giant.
