Netflix Stock Just Split. What It Means as Streaming War Heats Up.

Netflix’s stock starts trading on a split-adjusted basis on Monday. (Mario Tama/Getty Images)

Key Points

• Netflix implemented a 10-for-1 stock split on Monday, making shares more accessible to individual investors.
• Analysts project Netflix’s earnings before interest, taxes, depreciation, and amortization to increase 25% to $16.6 billion by 2026.
• Netflix is reportedly preparing a bid for Warner Bros. Discovery, alongside Paramount Skydance and Comcast, ahead of a November 20 deadline.

Netflix stock is dropping as a a 10-for-1 stock split takes effect.

The video streamer announced the split in late October. Every shareholder of record as of Nov. 10 received nine additional shares after Friday’s closing bell. The stock closed down 0.8% at $110.29 on Monday.

Splits don’t change the value of a company, or the dollar amount of equity that each shareholder owns. They’re designed to reduce a stock’s price to make it more affordable for individual investors, though in the days of fractional share purchases, that argument is less compelling that it once might have been.

Apple, Nvidia , Broadcom, Tesla, Chipotle Mexican Grill, and Walmart are among the well-known U.S. companies that have executed stock splits in recent years.

While the fundamentals haven’t changed, Netflix stock is still worth a look. Before the split took effect it had slid 11% over the past three months, dragged down by a third-quarter earnings miss that the company blamed on a dispute with Brazilian tax authorities.

The pullback could be a buying opportunity, as the future growth profile for the streamer looks strong. Analysts are forecasting that earnings before interest, taxes, depreciation and amortization to climb 25% to $16.6 billion in 2026, up from an expected $13.3 billion this year. The stock currently trades at about 43 times future earnings, but that sort of growth should help ease any valuation concerns.

Barron’s named Netflix as a stock pick on May 15, arguing that the streamer ought to be resilient to any disruption caused by sweeping U.S. tariffs and should benefit from its flywheel model—where more subscribers means more money to spend on content, which in turn attracts even more users.

The company still looks well-positioned in the streaming wars, although it may have to start making deals to maintain its advantage. Netflix, Paramount Skydance , and Comcast are all preparing bids for Warner Bros. Discovery ahead of a deadline on Nov. 20, The Wall Street Journal reported late Thursday, citing people familiar with the matter.

Write to George Glover at george.glover@dowjones.com