Meet the Stock-Split Stock Nobody's Talking About (Hint: Not Netflix). It Soared 3,530% Sin.;pce Its 2012 IPO, and It's a Buy Right Now, According to Wall Street

Late last month, investors were greeted with what was hailed by some as the biggest blockbuster stock split of 2025. Netflix (NASDAQ: NFLX) turned heads with a 10-for-1 stock split, marking the first time it had split its shares in nearly a decade. As one of the vaunted FAANG stocks and a household name, Netflix captured the spotlight -- especially since the company's lofty $1,100 stock price had led many investors to speculate that a stock split was on the table.

Driving Netflix's soaring stock price was impressive operating results. Over the past decade, Netflix's revenue has climbed an impressive 538%, fueling a 5,800% increase in net income. This, in turn, fueled a stock price that surged 922% (as of this writing), setting the stage for its much-ballyhooed stock split.

Investors might be surprised to learn that another stock split was announced late last month, but it didn't receive nearly as much attention as the streaming giant.

Image source: Netflix.

The "other" stock split

On October 29, in conjunction with the release of its third-quarter results, ServiceNow (NYSE: NOW) announced that its Board of Directors had approved a 5-for-1 stock split. The company noted that the move is subject to shareholder approval. To that end, management will hold a Special Meeting of Shareholders on Dec. 5, 2025, to put the matter to a vote. The company didn't provide any additional details about the prospective stock split.

Assuming ServiceNow shareholders approve the measure, the company will supply shareholders with additional details regarding the timing of the proposed split.

However, a look at the company's recent results and track record of growth provides some keen insight into why ServiceNow decided to effect a stock split.

Leveraging AI

ServiceNow operates a cloud-based platform that helps companies automate repetitive tasks and streamline workflows, and has integrated artificial intelligence (AI) at every step along the way. Its software-as-a-service (SaaS) platform offers ready-to-use applications for IT, human resources, customer service, and finance departments, among others. By simplifying tasks across the company and creating a single system for managing requests, ServiceNow enables businesses to increase efficiency, which, in turn, increases profitability. And business is booming.

In the third quarter, ServiceNow reported revenue that grew 22% year over year to $3.4 billion. Much of that came in the form of subscription revenue, which climbed 22% to $3.3 billion. This fueled adjusted earnings per share (EPS) of $4.86, which climbed 29%.

Other business metrics help illustrate the company's ongoing success. ServiceNow's remaining performance obligation (RPO) -- or contractual obligations not yet included in revenue -- climbed 24% year over year to $24.3 billion. When RPO is growing faster than current revenue, that provides insight into future demand, and in this case, it's a positive sign for investors.

Another bullish signal is the company's customer cohort growth. Going back to the earliest days, existing customers continue to expand their relationships with ServiceNow. For example, customers from 2010 have grown their total contract value by 288% compared to their initial obligation, and that number continues to increase. Furthermore, that trend holds true for every successive year.

Management appears convinced the company's growth spurt will continue and has raised its guidance for the fourth quarter and full year accordingly. For the fourth quarter, ServiceNow is forecasting revenue to grow 20% at the midpoint of its guidance to $3.425 billion, and RPO growth of 23%. For the full year, the company anticipates revenue growth of roughly 21% to $12.84 billion.

Analysts are still bullish on ServiceNow

Wall Street rarely agrees on anything, so it's telling that most analysts are bullish on ServiceNow. Of the 45 analysts who offered an opinion thus far in November, 89% rate the stock a buy or strong buy, and none recommend selling. Furthermore, an average price target of roughly $1,155 (pre-split) represents potential upside of 26% compared to Monday's closing price.

However, analysts at Morgan Stanley are more bullish than their Wall Street colleagues, assigning an outperform (buy) rating and a Street-high price target of $1,315. That suggests potential gains for investors of 44% compared to Monday's closing price. The analysts cite ServiceNow's robust execution, despite a challenging environment, and suggest the company's AI strategy is paying off. Just last month, the analysts estimated ServiceNow would generate 20% subscription and free cash flow growth through the end of fiscal 2027.

The stumbling block for some investors will be the stock's lofty valuation. ServiceNow is currently selling for 107 times earnings, and 44 times next year's expected earnings. While that's certainly a premium valuation, it's worth remembering that standard valuation metrics struggle to assess high-growth stocks -- and ServiceNow certainly qualifies. The stock has gained 3,530% since its 2012 IPO, far outpacing the 399% gains of the S&P 500.

That helps to illustrate that ServiceNow is deserving of a premium valuation and might be worth a look.

Danny Vena has positions in Netflix. The Motley Fool has positions in and recommends Netflix and ServiceNow. The Motley Fool has a disclosure policy.