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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 – Monster Beverage (MNST - Free Report), Tesla (TSLA - Free Report), Alphabet (GOOGL - Free Report), Palo Alto Networks (PANW - Free Report), and Shopify (SHOP - Free Report) – have all split their shares over the 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.

Monster Beverage Corporation

On Feb. 28, 2023, the energy beverage titan Monster declared a 2-for-1 split; shares began trading on a split-adjusted basis on March 28, 2023. Since the split, MNST shares have etched in a 2.4% gain, underperforming relative to the S&P 500 by a fair margin.

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Monster sports a solid growth trajectory, with earnings forecasted to climb more than 30% in its current fiscal year (FY23) and a further 17% in FY24.

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Tesla

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 Aug. 25, 2022. Since the split, Tesla shares have declined by 45% in value, coming nowhere near the general market’s performance.

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Tesla reported earnings this week; results came in somewhat mixed, with the company posting a 2.4% EPS beat and a negative 1% sales surprise. The market didn’t appreciate the results, with TSLA shares facing selling pressure post-earnings.

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Alphabet

The tech titan Alphabet announced a 20-for-1 split in early 2022. Shares began trading on a split-adjusted basis on July 18, 2022. Alphabet shares have retraced 3.5% in value post-split so far, again underperforming relative to the general market.

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Watch for Alphabet’s upcoming quarterly release expected on April 25; the Zacks Consensus EPS Estimate of $1.06 indicates a roughly 14% year-over-year pullback within earnings. The quarterly earnings estimate has been revised roughly 5% lower since January, as illustrated below.

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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 Sept. 14, 2022. Palo Alto Networks shares have been hot throughout 2023, as shown below. Since the split, PANW shares are up 5.7%, marginally outperforming the S&P 500.

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Value-focused investors may not find PANW shares attractive, with the company carrying a Style Score of “F” for Value. Presently, PANW’s 8.5X forward price-to-sales ratio resides on the expensive side, above the Zacks Computer and Technology sector average and the 7.5X five-year median.

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Shopify

SHOP shares started trading split-adjusted on June 29, 2022; the company performed a 10-for-1 split. As shown below, Shopify shares have delivered a strong performance overall since the split, up nearly 50% and crushing the general market’s performance.

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The stock has displayed significant momentum in 2023, delivering a 40% return and exceeding the Zacks Computer and Technology sector’s impressive 19% gain.

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Bottom Line

We’ve seen several stock splits over the last few years, with companies aiming to boost liquidity within shares and make them more affordable for potential investors.

All five companies above – Monster Beverage (MNST - Free Report), Tesla (TSLA - Free Report), Alphabet (GOOGL - Free Report), Palo Alto Networks (PANW - Free Report), and Shopify (SHOP - Free Report) – have split their shares over the last year.

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