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Which of These Stocks Has Been the Best Post-Split Buy?
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Stock splits have been relatively common in the market over the last several years, with companies aiming to boost liquidity within shares and knock down barriers for potential investors.
Of course, it's important to remember that a split doesn’t directly impact a company's financial standing or performance.
It raises a valid question: how do the companies currently stack up? Let’s take a closer look.
Tesla
All investors are familiar with Tesla, the undisputed EV leader and one of the best-performing stocks over the last decade. Currently, the stock is a Zacks Rank #3 (Hold).
In June of 2022, the mega-popular EV manufacturer announced a three-for-one stock split; shares began trading on a split-adjusted basis on August 25th, 2022.
Since the split, TSLA shares have lost nearly 40% in value, widely underperforming relative to the S&P 500.
Image Source: Zacks Investment Research
Tesla delivered a double beat in its latest release, exceeding the Zacks Consensus EPS Estimate by nearly 10% and registering a 2.5% revenue surprise. It’s worth noting that the recent top line beat snapped a streak of negative surprises.
Image Source: Zacks Investment Research
Alphabet
Alphabet has evolved from primarily being a search engine into a company with operations in cloud computing, artificial intelligence, autonomous vehicles, and more.
The tech titan announced a 20-for-1 split in early 2022; shares began trading on a split-adjusted basis on July 18th, 2022.
Since the split, GOOGL shares have primarily faced challenging price action, down roughly 4% and underperforming relative to the S&P 500.
Image Source: Zacks Investment Research
Perhaps to the interest of long-term investors, Alphabet’s valuation multiples have pulled back extensively; the company’s 20.6X forward earnings multiple sits well below the 26.1X five-year median, making shares cheap on a relative basis.
Image Source: Zacks Investment Research
Shopify
Shopify provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses. During the pandemic, the stock was a big-time winner.
SHOP shares began trading split-adjusted on June 29th, 2022; the company performed a 10-for-1 split.
Image Source: Zacks Investment Research
As we can see, Shopify shares have been hot post-split, up more than 30% and crushing the general market’s performance.
One of the most impressive aspects of Shopify is the company’s growth profile; earnings are forecasted to soar 50% in its current fiscal year (FY23) and a further 330% in FY24.
The projected earnings growth comes on top of forecasted Y/Y revenue climbs of 20% in FY23 and 22% in FY24.
Amazon
Amazon is an e-commerce giant with global operations. The company also enjoys a dominant position within the cloud computing space with its Amazon Web Services (AWS) operations.
AMZN’s 20-for-1 split was a bit of a surprise, as it was the company’s first split since 1999. Shares started trading on a split-adjusted basis on June 6th, 2022.
Image Source: Zacks Investment Research
Following the split, Amazon shares have lost roughly 22% in value, well off the general market’s performance.
AMZN posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by 40% and snapping a streak of negative surprises on the top and bottom lines.
Bottom Line
Stock splits are exciting announcements that investors can receive, with companies aiming to boost liquidity within shares.
Image: Bigstock
Which of These Stocks Has Been the Best Post-Split Buy?
Stock splits have been relatively common in the market over the last several years, with companies aiming to boost liquidity within shares and knock down barriers for potential investors.
Of course, it's important to remember that a split doesn’t directly impact a company's financial standing or performance.
Over the last year, several companies performed splits, including notable market titans such as Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , Shopify (SHOP - Free Report) , and Tesla (TSLA - Free Report) .
It raises a valid question: how do the companies currently stack up? Let’s take a closer look.
Tesla
All investors are familiar with Tesla, the undisputed EV leader and one of the best-performing stocks over the last decade. Currently, the stock is a Zacks Rank #3 (Hold).
In June of 2022, the mega-popular EV manufacturer announced a three-for-one stock split; shares began trading on a split-adjusted basis on August 25th, 2022.
Since the split, TSLA shares have lost nearly 40% in value, widely underperforming relative to the S&P 500.
Image Source: Zacks Investment Research
Tesla delivered a double beat in its latest release, exceeding the Zacks Consensus EPS Estimate by nearly 10% and registering a 2.5% revenue surprise. It’s worth noting that the recent top line beat snapped a streak of negative surprises.
Image Source: Zacks Investment Research
Alphabet
Alphabet has evolved from primarily being a search engine into a company with operations in cloud computing, artificial intelligence, autonomous vehicles, and more.
The tech titan announced a 20-for-1 split in early 2022; shares began trading on a split-adjusted basis on July 18th, 2022.
Since the split, GOOGL shares have primarily faced challenging price action, down roughly 4% and underperforming relative to the S&P 500.
Image Source: Zacks Investment Research
Perhaps to the interest of long-term investors, Alphabet’s valuation multiples have pulled back extensively; the company’s 20.6X forward earnings multiple sits well below the 26.1X five-year median, making shares cheap on a relative basis.
Image Source: Zacks Investment Research
Shopify
Shopify provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses. During the pandemic, the stock was a big-time winner.
SHOP shares began trading split-adjusted on June 29th, 2022; the company performed a 10-for-1 split.
Image Source: Zacks Investment Research
As we can see, Shopify shares have been hot post-split, up more than 30% and crushing the general market’s performance.
One of the most impressive aspects of Shopify is the company’s growth profile; earnings are forecasted to soar 50% in its current fiscal year (FY23) and a further 330% in FY24.
The projected earnings growth comes on top of forecasted Y/Y revenue climbs of 20% in FY23 and 22% in FY24.
Amazon
Amazon is an e-commerce giant with global operations. The company also enjoys a dominant position within the cloud computing space with its Amazon Web Services (AWS) operations.
AMZN’s 20-for-1 split was a bit of a surprise, as it was the company’s first split since 1999. Shares started trading on a split-adjusted basis on June 6th, 2022.
Image Source: Zacks Investment Research
Following the split, Amazon shares have lost roughly 22% in value, well off the general market’s performance.
AMZN posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by 40% and snapping a streak of negative surprises on the top and bottom lines.
Bottom Line
Stock splits are exciting announcements that investors can receive, with companies aiming to boost liquidity within shares.
In 2022, we saw many stock splits, including those from Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , Shopify (SHOP - Free Report) , and Tesla (TSLA - Free Report) .
Who’s next to split?