Netflix (NFLX 0.36%) has shown investors once again who's on top of the streaming industry. On Jan. 21, the company reported its Q4 2024 earnings, and they were a doozy. Revenue growth accelerated, profit margins climbed higher, and total streaming membership surpassed 300 million.

Unsurprisingly, Netflix stock soared in the days following this announcement. It currently sits at a price just below $1,000 per share, a point where companies often start thinking about a stock split. Netflix has already split its stock twice before, and it could do so again in 2025 if shares continue to rise.

Stellar Q4 earnings results

The fourth quarter was another astounding one for Netflix. It added 18.9 million subscribers to end the year with 301.6 million paid memberships. The low-cost ad-supported tier and addition of live events like NFL football games continue to attract audiences around the globe. Revenue grew 16% year over year to $10.2 billion, while operating income climbed 52% to $2.2 billion.

Earnings per share (EPS) -- the key driver of stock returns over the long haul -- have grown 3,550% in the last 10 years and reached $19.83 in 2024. Compared to a share price of almost $990 as of this writing, Netflix's price-to-earnings ratio (P/E) is currently 50. Investors are paying a premium for the leadership and growth at Netflix, which is not surprising given its impressive track record.

Management thinks there's plenty of room to extend its growth. It has room to invest outside of the U.S.; it's working on monetization for its ad-supported tier; and it has the capital to invest in live events and sports. Netflix estimates it captures only 6% of entertainment spending in the markets it operates in (excluding Russia and China). If it can grow that number going forward, that's a lot of additional revenue the company can earn in the years to come.

Rising share price and an increasing likelihood of a share split

Netflix previously split its stock in 2015 when it was trading around $700 per share. Since then, it has gained nearly 900%. With shares about to break into the four-figure range, management is likely considering another split. It's difficult for a company to gift out stock options and attract all types of investors when the share price is over $1,000.

Data by YCharts.

What to focus on instead of a Netflix stock split

While it's quite possible Netflix splits its stock in 2025, it's not a certainty. Fortunately, the company's decision on this matter will have little effect on the long-term performance of the stock.

Wait, what? Don't stock-split stocks outperform? The empirical data says they do, but that doesn't mean a stock split is responsible for the outperformance. That's usually due to the strong results that are fueling the stock's gains in the first place.

What matters more to your returns over the long haul is the price you pay for the stock and the company's earnings growth when you hold it. In that context, Netflix's high valuation and mature business lead me to believe it's best for investors to stay away from the stock at the moment. It doesn't mean you should sell your stake if you're already a shareholder, but given the market's very high expectations right now, I'm not a buyer at today's prices.