The discovery of the Stern-Gerlach (SG) effect almost a century ago was followed by suggestions to use the effect as a basis for matter-wave interferometry. However, the coherence of splitting particles with spin by a magnetic gradient to a distance exceeding the position uncertainty in each of the arms was not demonstrated until recently, where spatial interference fringes were observed in a proof-ofprinciple experiment. Here we present and analyze the performance of an improved high-stability SG spatial fringe interferometer based on two spatially separate wave packets with a maximal distance that is more than an order of magnitude larger than their minimal widths. The improved performance is enabled by accurate magnetic field gradient pulses, originating from a novel atom chip configuration, which ensures high stability of the interferometer operation. We analyze the achieved stability using several models, discuss sources of noise, and detail interferometer optimization procedures. We also present a simple analytical phase-space description of the interferometer sequence that demonstrates quantitatively the complete separation of the superposed wave packets 2 .indistinguishable spin state. This was made possible by the long experimental times available due to the slow velocity of the atoms, initially trapped and prepared in a Bose-Einstein condensation (BEC) state, as well as the inherent nonlinearity of the applied magnetic gradients giving rise to a focusing (lensing) effect. Due to the large splitting (relative to the wave packet width), spatial interference fringes could be observed from the SG effect for the first time, turning this experiment into an analog of the double-slit experiment.The interferometric scheme based on spatial interference fringes has an advantage over the closed-loop fourmagnetic-gradients interferometer originally envisioned, in that it does not require very accurate recombination of two wave packets with different spins, as we demonstrate in this paper. Specifically, it is insensitive to imperfections of the wave packet shape, and to magnetic gradient imperfections giving rise to the Humpty-Dumpty effect. On the other hand, it requires high resolution imaging of the fringe patterns and therefore limits the final separations in position or momentum between the two wave packets. This limitation can be overcome by additional accelerating and stopping stages, as demonstrated with Bragg splitting [21]. Such robustness may eventually lead to advantageous technological applications.Here we present an analysis of the performance of a high stability SG spatial fringe longitudinal interferometer, based on an atom chip [22], over a range of momentum splitting and separation distances allowed by the resolution of our imaging system (up to a differential velocity of ∼10 mm s −1 after splitting and separation of ∼4 μm). For this range we show a multi-shot visibility (a measure of stability) larger than 90%, corresponding to a phase instability smaller than 0.45 radians. We analyze the sources o...