3 Stock-Split Stocks to Buy Before They Soar Between 73% and 149% According to Select Wall Street Analysts

Stock splits have captured the imagination of investors in recent years. Shareholders are understandably intrigued by stock splits, as they are historically a sign of a company performing at a high level. The practice normally follows years of strong operating and financial results, driving a significant increase in its stock price, which can put shares out of reach of everyday investors.

Stock splits ultimately make shares more affordable, but there's another reason investors are captivated by these businesses. A company with a strong track record of growth generally continues to deliver market-beating returns. History shows that companies that initiate stock splits generate returns of 25%, on average, in the year following the announcement, compared with 12% average gains for the S&P 500, according to data compiled by Bank of America analyst Jared Woodard.

Let's look at three recent stock-split stocks that still have upside ahead, according to Wall Street.

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Stock-split buy No. 1: Netflix -- 73% implied upside

Netflix (NASDAQ: NFLX) stock has been a winning investment for patient investors. The stock has gained 782% over the past decade (as of this writing), resulting in last year's 10-for-1 stock split.

The stock is currently 41% off its peak (as of this writing), as concerns mount about the acquisition of assets from Warner Bros. Discovery. Paramount Skydance's hostile takeover bid notwithstanding, Netflix has walked away from pricey content deals before, so I trust management's judgment not to engage in a costly bidding war.

The results are compelling. In the fourth quarter, Netflix generated record revenue that climbed 17% to $12 billion, its fastest pace of growth in nearly five years. This drove diluted earnings per share (EPS) up 30% to $0.56.

Wall Street is siding with Netflix. Of the 44 analysts who have offered an opinion in February, 70% rate it a buy or strong buy, and the Street's average price target of $111 implies potential additional upside of 43%.

BMO Capital analyst Brian Pitz is more bullish than his peers, with an outperform (buy) rating and a $135 price target, suggesting potential gains of 73% for Netflix shareholders. The analyst calls the company's result "solid" and cites its growing ad revenue, which is expected to double to $3 billion this year, or 6% of Netflix's revenue.

The stock is currently trading for 31 times earnings, its lowest valuation in three years. That, along with the company's consistent track record, makes Netflix stock a buy.

Stock-split buy No. 2: Booking Holdings -- 90% implied upside

Booking Holdings (NASDAQ: BKNG) stock has been one of the best-performing stocks of the past quarter-century, rewarding patient investors with returns of more than 31,000%. Just this week -- after years of speculation -- the online travel agent announced a massive 25-for-1 stock split.

The stock tumbled this week amid fears of a travel-related slowdown, but the results tell a compelling story. Fourth-quarter revenue grew 16% year over year to $6.3 billion, driving EPS up 38% to $44.22. Gross booking rose 16%, while room nights increased 9%. The company's cash generation was outstanding, as operating cash flow of $1.5 billion soared 107% and free cash flow of $1.4 billion surged 120%.

Booking Holdings has a strong contingent of Wall Street support. Of the 39 analysts who offered an opinion in February, 77% rate the stock a buy or strong buy, with an average price target of $5,915, implying potential upside of 45%.

HSBC analyst Meredith Prichard Jensen is much more bullish, with a buy rating and $7,746 price target -- the highest on Wall Street -- implying potential upside of 90%. She cited the company's better-than-expected results, calling Booking an "undervalued global leader."

The stock is 30% off its peak and now trades for 24 times earnings, well below its three-year average multiple of 29. This gives discerning investors the opportunity to get Booking Holdings stock at a significant discount.

Stock-split buy No. 3: ServiceNow -- 149% implied upside

ServiceNow's (NYSE: NOW) stock has gained 852% over the past decade, despite plunging 55% from its peak (as of this writing), largely due to its then-lofty valuation. At the time, the stock traded above $800 per share, prompting its 5-for-1 stock split.

The stock has also been caught up in the downturn in software-as-a-service (SaaS) stocks. There are fears its software tools, which automate repetitive tasks and streamline workflows, will be disrupted by artificial intelligence (AI) -- yet the company's results remain robust.

In the fourth quarter, ServiceNow generated revenue that grew 21% year over year to $3.53 billion, driving adjusted basic EPS up 24% to $0.92. Furthermore, its remaining performance obligation (RPO) climbed 27% to $24.3 billion, building a solid foundation for future growth.

Wall Street is optimistic. Of the 44 analysts who offered an opinion in February, 91% rate the stock a buy or strong buy, with an average price target of $189, implying potential upside of 81%.

Citizen's analyst Patrick Walravens is even more bullish, with an outperform (buy) rating and a $260 price target -- the highest on Wall Street -- implying upside potential of 149%. He cites the company's revenue growth, margin expansion, and "attractive financial profile" for his bullish view.

ServiceNow has shed last year's frothy valuation and now trades for 30 times earnings. Given its compelling growth prospects, ServiceNow is worth a look.

Bank of America is an advertising partner of Motley Fool Money. HSBC Holdings is an advertising partner of Motley Fool Money. Danny Vena, CPA has positions in Booking Holdings and Netflix. The Motley Fool has positions in and recommends Booking Holdings, Netflix, ServiceNow, and Warner Bros. Discovery. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.