News Digest / Latest Stock Market News / MercadoLibre and Spotify Prime Candidates for Stock Splits Amidst Impressive Growth Trajectories

MercadoLibre and Spotify Prime Candidates for Stock Splits Amidst Impressive Growth Trajectories

Lukas Schmidt
09:00am, Monday, Jun 03, 2024
MercadoLibre and Spotify Prime Candidates for Stock Splits Amidst Impressive Growth Trajectories

The buzz around stock splits has been quite electric in the market lately. With companies like Walmart (NYSE: WMT), Chipotle Mexican Grill (NYSE: CMG), and Nvidia (NASDAQ: NVDA) leading the way, traders are eagerly watching for the next big announcements. Today, we spotlight two exceptional growth stocks that appear primed for their own stock splits.

MercadoLibre

First on our radar is MercadoLibre (NASDAQ: MELI). This Latin American e-commerce and payments giant has seen its stock price soar past the $1,700 mark, making it an ideal candidate for a stock split. Despite its impressive 25-year history as a public company, MercadoLibre has never split its stock. Given the company’s stellar fundamentals, it might be time to reconsider.

Over the past year, MercadoLibre has reported $15.6 billion in revenue and a net income of $1.1 billion, boasting a quarterly earnings growth of 71% year-over-year. Analysts project that the company’s revenue will continue to grow at a blistering pace, with sales expected to increase by 33% this year. A stock split could potentially draw in more retail investors who are currently deterred by the high stock price of this red-hot growth stock.

Spotify Technology

Next up is Spotify Technology (NYSE: SPOT). This streaming service, which faced significant challenges in late 2022 with its stock plummeting over 80% from its peak, has made a remarkable turnaround. Thanks to CEO Daniel Ek's strategic cost-cutting measures, Spotify recently reported a quarterly net profit of $214 million.

Spotify has not only trimmed expenses but has also made strides in growing its ad-based revenue. While subscriptions still account for 89% of its total revenue, advertising revenue has surged to $389 million or 11% of the total. Currently, Spotify’s shares trade around $300, a price point that may seem steep for many investors. A stock split could make it more accessible and appealing to retail investors.

Both MercadoLibre and Spotify Technology are noteworthy candidates for a stock split. Their impressive growth trajectories and substantial stock prices make them prime subjects for speculation in this dynamic market. As we keep a close watch, investors might find new opportunities with these potential splits, redefining their strategies and portfolios along the way.

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Lukas Schmidt

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