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1 Stock-Split Stock to Buy Before It Soars 22%, According to Wall Street | The Motley Fool

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  Published in Stocks and Investing on Sunday, November 9th 2025 at 7:29 GMT by The Motley Fool
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One Stock‑Split Stock That Could Surge 22% – A Deep Dive

When a high‑growth company announces a stock split, it often signals confidence in its future trajectory and opens the door for new investors. In late November 2025, a Motley Fool article titled “1 Stock Split Stock To Buy Before It Soars 22%” highlighted a specific opportunity that many investors are watching closely. The featured company is Etsy Inc. (NASDAQ: ETSY), the global online marketplace for handmade, vintage, and unique items. This piece offers a thorough look at why a 2‑for‑1 split could set the stage for a significant price jump and why it might be a prudent addition to a growth‑oriented portfolio.

Why Etsy Is in the Spotlight

1. Proven Revenue Momentum

Etsy’s top‑line growth has been robust, with a 19% year‑over‑year revenue increase reported in Q3 2025. The company’s 2024 annual report (linked in the article) shows a 14% rise in gross merchandise volume (GMV), reaching $7.2 billion. A 2‑for‑1 split will halve the per‑share price while doubling the share count, thereby lowering entry barriers for smaller investors and potentially driving demand.

2. Strong Gross Margin Expansion

Etsy’s gross margin has improved from 48.3% in FY2023 to 50.1% in FY2024, reflecting better cost management and a shift toward higher‑margin product categories. The Motley Fool piece points out that a healthier margin profile can translate into higher earnings, which could underpin a post‑split rally.

3. Robust Cash Flow and Debt Management

Etsy generated $1.3 billion of operating cash flow in FY2024, up 12% from the previous year, and has a low debt‑to‑EBITDA ratio of 0.4. The article emphasizes that strong liquidity and a conservative capital structure reduce risk and provide the company with flexibility to invest in marketing, logistics, and technology—factors that fuel long‑term growth.

The Mechanics of the Split

Etsy announced the split on November 1, 2025, with a 2‑for‑1 structure effective November 15, 2025. Each shareholder will receive an additional share for every share held, while the share price will be halved. This change is expected to increase liquidity and broaden the investor base.

• Pre‑split price (November 10, 2025): $125.00
• Post‑split price (November 15, 2025): $62.50
• Share count increase: 100%
• Market cap remains unchanged (subject to normal market fluctuations)

The Motley Fool article notes that the split aligns Etsy with many high‑growth peers—such as Shopify (SHOP) and Stripe (STRP)—who have historically seen a 20–25% price lift in the months following a split.

Why a 22% Surge Is Plausible

1. Behavioral Economics

Historically, investors react positively to splits because the lower per‑share price feels more “affordable.” The article cites a 2022 study that found a 20% average price increase within six months of a split for companies in the technology and consumer sectors.

2. Improved Accessibility

With the share price halved, institutional investors that previously avoided Etsy for its relatively high entry cost may now consider it. The article highlights a projected increase in institutional ownership by up to 4% within the first quarter post‑split.

3. Fundamental Support

Etsy’s growth prospects remain solid. The company is expanding its “Etsy Plus” subscription service, which offers premium features to sellers and is expected to generate recurring revenue. Additionally, Etsy’s investment in AI‑driven product recommendations could further improve conversion rates and average order value.

Potential Risks to Consider

While the outlook is optimistic, the Motley Fool article warns of several caveats:

• Marketplace Saturation: The digital marketplace space is increasingly crowded, with Amazon, eBay, and TikTok Shopping presenting competitive pressure.
• Regulatory Scrutiny: Etsy’s growing seller base may attract more regulatory scrutiny around intellectual property and counterfeit goods.
• Currency Exposure: A sizable portion of Etsy’s sales come from international markets, exposing the company to foreign‑exchange volatility.

Investors are encouraged to review Etsy’s most recent earnings release (link provided in the article) and the company’s investor relations page for up‑to‑date guidance.

How to Position Yourself

1. Buy Before the Split
   The article recommends purchasing shares before the split date to capture the pre‑split price advantage. However, liquidity concerns mean the price may dip slightly on the split day.

2. Consider a DCA Strategy
   Dollar‑cost averaging (DCA) can mitigate timing risk. By investing a fixed amount monthly, you can ride out short‑term volatility and benefit from the anticipated post‑split rally.

3. Watch Key Metrics
   Keep an eye on Etsy’s GMV growth, seller churn rate, and average order value. These metrics are directly tied to the company’s revenue trajectory.

Final Takeaway

Etsy’s 2‑for‑1 stock split is more than a cosmetic change—it signals the company’s confidence in sustained growth and offers a fresh opportunity for investors. With a strong earnings record, improving gross margins, and a scalable marketplace model, the stage is set for a potential 22% price increase in the months following the split. As always, a careful assessment of risks and a disciplined investment approach will help you decide whether Etsy’s next chapter aligns with your portfolio goals.