Should Investors Buy Shares Post-Split?


Many stock splits have occurred in recent years, with companies aiming to increase liquidity within shares and erase barriers to entry for potential investors.

Of course, it’s critical to remember that a split does not directly impact a company’s financial position or performance.

Several companies – Tesla TSLA, Alphabet GOOGL, and Palo Alto Networks PANW – have all split their shares since the beginning of last year.

It raises a valid question: is buying post-split a good strategy? Let’s take a closer look at the performance of each post-split.


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, Tesla shares are down roughly 9%, underperforming the S&P 500 handily. Still, it’s no secret that they’ve rebounded in a big way in 2023, up nearly 120%.


Zacks Investment Research
Image Source: Zacks Investment Research

Analysts have taken a bearish stance on the company’s earnings outlook, with expectations decreasing across the board in the near term.

Zacks Investment Research
Image Source: Zacks Investment Research


The tech titan Alphabet announced a 20-for-1 split in early 2022. Shares began trading on a split-adjusted basis on July 18th, 2022.

Alphabet shares have delivered a strong performance post-split so far, up roughly 13% and modestly lagging behind the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

The company is forecasted to grow at a solid pace, with estimates calling for 18% earnings growth on 6% higher revenues in its current fiscal year (FY23). And looking ahead to FY24, earnings and revenue are forecasted to climb an additional 15% and 10%, respectively.

Palo Alto Networks

PANW’s three-for-one stock split in mid-September didn’t get much attention. The company’s shares started trading split-adjusted on September 14th, 2022.

PANW shares have been the best performers out of the bunch post-split, up more than 30% and crushing the S&P 500’s 13.4% return in the same period.

Zacks Investment Research
Image Source: Zacks Investment Research

The company has enjoyed positive earnings estimate revisions, helping land it into a favorable Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Stock splits are always an exciting announcement for investors, as companies aim to boost liquidity within shares and knock down barriers to entry.

Still, buying post-split doesn’t always result in considerable near-term gains, as we can see from Tesla’s TSLA and Alphabet’s GOOGL post-split performances. Conversely, Palo Alto Networks PANW shares have found plenty of buyers post-split.

Free Report: Must-See Hydrogen Stocks

Hydrogen fuel cells are already used to provide efficient, ultra-clean energy to buses, ships and even hospitals. This technology is on the verge of a massive breakthrough, one that could make hydrogen a major source of America’s power. It could even totally revolutionize the EV industry.

Zacks has released a special report revealing the 4 stocks experts believe will deliver the biggest gains.

Download Cashing In on Cleaner Energy today, absolutely free.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original Post

Articles You May Like

Cathie Wood On Bitcoin: Did She See The 70% Rally Since September Coming?
Bitcoin continues its surge, climbs past $41,000 for first time in 18 months
Victoria’s Secret’s stock rises on fourth-quarter earnings guidance
German stocks rise after ending at a record high
3 Cryptocurrencies in a Price Crunch at Critical Levels: Here’s How to Trade Them

Leave a Reply

Your email address will not be published. Required fields are marked *