Stock splits frequently grab headlines, but their true significance lies in how they reflect a company’s success and market appeal, rather than changing fundamental value. In a deep dive into recent stock split plays, we uncover why Interactive Brokers Group presents a compelling long-term buy opportunity, while Sezzle, operating in the volatile Buy Now, Pay Later (BNPL) sector, is best avoided for now.
For many investors, a stock split feels like an exciting event, often signaling that a company has enjoyed prolonged success and its share price has risen significantly. The primary mechanism of a forward stock split is simple: it lowers the share price by proportionately increasing the number of outstanding shares. This makes shares more nominally affordable, attracting individual investors who might not have access to fractional share purchases or prefer a lower per-share entry point. However, it’s crucial to remember that a split is a purely cosmetic change, altering neither the company’s market capitalization nor its underlying business fundamentals or per-share financials.
Despite this, companies that perform splits often remain highly popular. This popularity stems from the fact that splits are typically executed by thriving businesses that have outpaced their peers in innovation and growth. Over the past few years, several high-profile companies have conducted forward stock splits, drawing significant investor attention.
The Lure of the Split: A Look at Recent Movers
Since July 2021, a number of industry leaders have announced and executed forward stock splits, including:
- NVIDIA (4-for-1 split in July 2021)
- Amazon (20-for-1 split in June 2022)
- Dexcom (4-for-1 split in June 2022)
- Shopify (10-for-1 split in June 2022)
- Alphabet (20-for-1 split in July 2022)
- Tesla (3-for-1 split in August 2022)
- Palo Alto Networks (3-for-1 split in September 2022)
- Monster Beverage (2-for-1 split in March 2023)
- Novo Nordisk (2-for-1 split in September 2023)
More recently, Chipotle Mexican Grill and Williams-Sonoma also performed respective 50-for-1 and 2-for-1 stock splits. The appeal of these companies often goes beyond the split itself, reflecting robust underlying businesses. Yet, not all post-split performances are created equal, and some companies face more significant headwinds than others, requiring investors to look past the split and into the fundamentals.
Interactive Brokers: A Stealthy Titan to Buy Hand Over Fist
Among the companies that have recently performed stock splits, Interactive Brokers Group (NASDAQ: IBKR), which split its stock in June 2025, stands out as a compelling long-term buy. This brokerage firm has quietly become a dominant force by serving both individual and advanced professional clients with a vast inventory of investment assets. This extensive offering gives it a significant competitive edge, driving its customer accounts to 4.1 million in the last quarter, representing a robust 32% year-over-year growth.
Interactive Brokers’ success is underpinned by its relentless focus on technology, automation, and operational frugality, which has translated into some of the best profit margins in the industry. For instance, in its third quarter of 2023, the company reported an impressive pretax profit margin of 79%. This means that for every $100 in revenue, $79 flows directly to the bottom line before taxes, a testament to its efficient business model. As noted by a report on its financial results, its strong performance continues to impress the market (Interactive Brokers Investor Relations).
The company’s ambition extends globally. Interactive Brokers is one of the few brokerages in the U.S. that enables direct investment in international markets, positioning it uniquely for professional and advanced traders seeking diversified global portfolios. Over the past decade, the company has seen cumulative revenue growth of 600%, with earnings per share (EPS) soaring by nearly 1,000%. With a forward price-to-earnings (P/E) ratio just above 30, and continued growth prospects, Interactive Brokers appears to be an attractive buy for patient investors seeking a high-growth opportunity in a well-managed financial institution.
Sezzle: Navigating the Perils of BNPL and High Risk
On the other end of the spectrum, Sezzle (NASDAQ: SEZL), another stock-split company, carries significant risks that make it an investment to avoid for now. Sezzle operates in the Buy Now, Pay Later (BNPL) sector, a segment that gained popularity during the COVID-19 pandemic with aspirations of disrupting traditional credit cards. While the BNPL industry has seen steady growth, its highly competitive nature and inherent lending risks present substantial challenges.
Sezzle has demonstrated rapid revenue growth, with a cumulative increase of 224% and a 76% year-over-year rise in the last quarter. However, in a lending business, rapid growth can mask underlying risks, particularly concerning the quality of consumer loans. As of a recent report, Sezzle holds $185 million in notes receivable (consumer loans) on its balance sheet. A fast-expanding loan portfolio, especially one with unproven underwriting practices or during an economic downturn, can expose shareholders to considerable downside risk if loan defaults increase.
Moreover, the BNPL market is hypercompetitive and lacks strong competitive advantages. Major players like Affirm, along with established financial technology giants such as PayPal, have integrated BNPL services into their extensive product ecosystems. This creates immense pressure on smaller, pure-play BNPL providers like Sezzle. The sector faces ongoing challenges amid tightening financial conditions, as reported by outlets like Reuters, which highlights the difficulties smaller players encounter (Reuters). While Sezzle trades at a seemingly cheap P/E ratio of 15, this valuation belies the significant risks associated with an unproven lending operation in a cutthroat market.
The Long-Term View on Stock Splits and Investment Choices
The allure of stock splits is undeniable, often pointing to companies with a history of strong performance. However, savvy investors understand that a split is merely an accounting adjustment. The true measure of an investment lies in the fundamental health, growth prospects, and valuation of the underlying business.
In our analysis, Interactive Brokers exemplifies a company leveraging technology and a global reach to sustain high profitability and growth, making it a strong candidate for long-term portfolio inclusion. Conversely, Sezzle, despite its rapid revenue expansion, navigates a perilous path in the highly competitive and inherently risky BNPL lending sector, making it an investment to approach with extreme caution or avoid altogether.
