1 Sensational Stock-Split Stock to Buy in November, and 1 That's Rife With Red Flags to Avoid

Though game-changing technological innovations, such as artificial intelligence and quantum computing, have helped propel the current bull market, don't overlook the role stock splits have played in fueling investor optimism. The $30/share pop in Netflix stock following its stock-split announcement late last week points to the power of this trend.

A stock split is an event that allows publicly traded companies to adjust their share price and outstanding share count by the same magnitude. Keep in mind that these changes are purely cosmetic and have no effect on a company's market cap or its operating performance.

Despite the superficial nature of these changes, investors often take opposite approaches to the two types of stock splits. Reverse splits, which are engineered to increase a company's share price, are usually shunned by the investing community. Public companies in need of increasing their share price are often doing so to avoid delisting from a major stock exchange and are commonly struggling from an operating standpoint.

Image source: Getty Images.

In comparison, investors tend to flock to businesses completing forward splits, which make a company's stock more nominally affordable for retail investors who can't buy fractional shares with their broker. Companies announcing and enacting forward splits are typically out-innovation and out-executing their peers.

To date, around a half-dozen high-profile/brand-name companies have announced or completed a stock split in 2025. One of these businesses stands out for all the right reasons and is worth adding to your portfolio right now, while another is flush with challenges and best avoided by investors in November.

A 58,000% gain since its IPO is just the start for this sensational stock-split stock

Among Wall Street's most prominent splits of 2025 (beyond Netflix), auto parts supplier O'Reilly Automotive (NASDAQ: ORLY) arguably sits at the head of the table.

Though it was the first brand-name business to declare its intent to split this year, O'Reilly's decision to allow its shareholders to weigh in (via vote) at the company's annual meeting pushed the implementation of its 15-for-1 forward split to after the closing bell on June 9. Following its split, shares of the company dipped from nearly $1,400 to closer to $90, which made them much more palatable for everyday investors who can't buy fractional shares.

The O'Reilly Automotive growth story begins with a favorable macro trend. According to the latest annual report from S&P Global Mobility, a division of the more-familiar S&P Global, the average age of cars and light trucks on U.S. roadways, based on registrations, hit an all-time high of 12.8 years in 2025. This is up from an average age of 11.1 years in 2012 and points to a clear trend of drivers keeping their vehicles longer than ever before.

While newer vehicles are certainly built better, higher auto loan rates (a function of the Federal Reserve aggressively raising interest rates between March 2022 and July 2023) have also influenced this decision by drivers and businesses to keep their vehicles longer. Auto parts suppliers like O'Reilly Automotive are being relied on by drivers and mechanics to supply the parts and accessories needed to keep these vehicles in good working order.

Another reason for O'Reilly's ongoing success is its hub-and-spoke distribution model. It entered the year with 31 regional distribution centers, close to 400 hub stores, and north of 6,000 retail locations. These hub stores ensure that more than 153,000 stock keeping units (SKUs) are accessible on a same-day or overnight basis for its retail locations.

But what's really set O'Reilly Automotive apart, from an investment standpoint, is its share repurchase program. Since initiating a buyback program in January 2011, a shade over $26.9 billion has been spent to retire 60% of the company's outstanding shares. Businesses with steady or growing net income should see their earnings per share climb over time due to buybacks.

In the 32-plus years since O'Reilly Automotive became a publicly traded company, its shares have vaulted higher by approximately 58,000%. Based on these aforementioned catalysts, its stock would appear to have plenty of long-term upside.

Image source: Lucid.

Wall Street's most-anticipated reverse stock split of 2025 is rife with red flags

At the other end of the spectrum is a company that completed the most-awaited reverse stock split of 2025: electric-vehicle (EV) maker Lucid Group (NASDAQ: LCID).

Following the close of trading on Aug. 29, Lucid consolidated its more than 3 billion outstanding shares down to around 307 million in a 1-for-10 reverse split. In the process, its share price lifted from below $2 to closer to $20.

The logic behind this reverse split is twofold. First, it removes any potential danger of Lucid Group stock dipping below $1 per share, which is the minimum threshold for continued listing on the Nasdaq stock exchange.

Secondly, some institutional investors and investment funds will avoid stocks whose share price is below $5 because they're deemed too risky. Enacting a 1-for-10 split and lifting its share price closer to $20 should put Lucid Group stock back on the radar of institutional investors.

Unfortunately, Lucid Group's split is par for the course with most reverse splits in that it was undertaken from a position of weakness. A higher nominal share price by no means masks this company's ongoing challenges.

To begin with, management hasn't been in the ballpark with its production expectations since Lucid became a public company in July 2021 via a merger with a special purpose acquisition company (SPAC). When Lucid burst onto the scene, management was forecasting 90,000 units produced in 2024. By the time 2024 arrived, this estimate had been slashed to just 9,000 EVs. Even in 2025, management is still missing the mark, with full-year production expected to come in between 18,000 and 20,000 units, down from a prior forecast of 20,000 EVs.

To build on this point, Lucid completely missed its opportunity to dominate the luxury EV space. With Tesla moving away from the luxury Model S to mass-produce the more-affordable Model 3 sedan, Lucid had a red-carpet opportunity to seize control of the luxury EV market. But thanks to supply chain and production snafus, it completely whiffed.

It's also been hampered by the delayed launch of its Gravity SUV. Similar production and supply chain issues pushed Gravity's showroom introduction from 2024 into 2025.

But the icing on the cake that's seemingly cemented Lucid Group as a stock to steer clear of in November (and possibly beyond) is its ongoing operating losses and staggering cash burn. Although it closed out June with $4.86 billion in total liquidity, and the company has received billions of dollars in backing from Saudi Arabia's Public Investment Fund, Lucid burned through almost $1.26 billion in cash from its operating activities in just the first six months of 2025.

While it would be nice to see Lucid succeed, the data tells a different story.

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix, S&P Global, and Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.