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Shift4 Payments (FOUR)
NYSE:FOUR
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Shift4 Payments
(NYSE:FOUR)75Outperform
Positive Factors
Future Earnings
Updated earnings estimates indicate a significant increase in future earnings for Shift4 Payments, Inc.
M&A Strategy
The acquisition of Global Blue is seen as a strategic move that aligns with Shift4 Payments' long-term strategy and offers significant cross-selling opportunities.
Negative Factors
CEO Transition
There is a potential execution risk due to the CEO transition and integration of Global Blue.
Financial Performance
The announcement of the Global Blue acquisition was dampened by a significant revenue miss in the 4Q24 report and weaker-than-expected FY25 guidance.
Revenue Guidance
Shift4 Payments' FY25 gross revenue guidance trailed the consensus estimate, and its adjusted EBITDA guidance was also below expectations.
Shift4 Payments (FOUR) vs. S&P 500 (SPY)
Market Cap
$8.43B
Dividend YieldN/A
Average Volume (3M)2.05M
Price to Earnings (P/E)29.1
Beta (1Y)2.17
Revenue Growth29.86%
EPS Growth128.19%
CountryUS
Employees4,000
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)3.06
Shares Outstanding67,777,180
10 Day Avg. Volume2,436,847
30 Day Avg. Volume2,049,286
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)N/A
Price to Sales (P/S)2.68
Price to Cash Flow (P/CF)11.60
P/FCF Ratio13.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$127.50Price Target Upside42.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Shift4 Payments Business Overview & Revenue Model
Company DescriptionShift4 Payments (FOUR) is a leading provider of integrated payment processing and technology solutions. The company operates in the financial technology sector, offering a range of services tailored to meet the needs of various industries, including hospitality, retail, and e-commerce. Shift4 Payments provides end-to-end payment solutions that enable businesses to securely process transactions, manage point-of-sale systems, and enhance operational efficiencies.
How the Company Makes MoneyShift4 Payments generates revenue through a combination of transaction-based fees and subscription services. The company earns money primarily by charging merchants a percentage of each transaction processed through its platform. Additionally, Shift4 Payments offers value-added services such as point-of-sale software, payment terminals, and analytics tools, which contribute to its revenue. Key partnerships with banks, financial institutions, and technology providers further strengthen its market presence and enhance its service offerings, driving additional revenue streams.
Shift4 Payments Financial Statement Overview
Summary
Shift4 Payments shows strong financial growth with significant revenue increases and improved profitability. The company has enhanced cash management capabilities, though a high debt-to-equity ratio poses some risk. Overall, the financial performance indicates a positive outlook.Income Statement
The income statement shows strong growth with a significant revenue increase from 2019 to 2023. Gross profit and net income have also improved, with the net profit margin climbing from negative to positive values. EBIT and EBITDA margins have improved, indicating better operational efficiency despite earlier losses.85
Very Positive
Balance Sheet
The balance sheet reflects a solid position with increasing stockholders' equity and total assets over the years, suggesting a strengthening financial base. However, the debt-to-equity ratio is relatively high, indicating leverage risk. The equity ratio has improved, highlighting growing financial stability.75
Positive
Cash Flow
Cash flows are robust, with operating cash flow showing a positive trend and significant improvements in free cash flow. The company has transitioned from negative to positive free cash flow, indicating better capital management. The operating cash flow to net income ratio is strong, demonstrating efficient cash generation from operations.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.33B | 2.56B | 1.99B | 1.37B | 766.90M | Gross Profit |
| 973.10M | 687.80M | 470.20M | 278.40M | 177.80M | EBIT |
| 247.00M | 114.80M | 58.10M | -49.00M | -63.70M | EBITDA |
| 356.80M | 366.20M | 268.50M | 55.30M | 10.60M | Net Income Common Stockholders |
| 229.60M | 86.20M | 75.10M | -74.00M | -111.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.21B | 455.00M | 776.50M | 1.23B | 927.80M | Total Assets |
| 5.04B | 3.39B | 2.55B | 2.34B | 1.78B | Total Debt |
| 2.88B | 1.78B | 1.77B | 1.76B | 1.01B | Net Debt |
| 1.67B | 1.32B | 988.80M | 529.70M | 78.50M | Total Liabilities |
| 4.02B | 2.52B | 2.07B | 1.94B | 1.11B | Stockholders Equity |
| 806.60M | 653.30M | 347.30M | 272.80M | 459.60M |
| Cash Flow | Free Cash Flow | |||
| 500.30M | 250.70M | -104.60M | -56.30M | -9.50M | Operating Cash Flow |
| 500.30M | 388.30M | 275.40M | 29.20M | 23.40M | Investing Cash Flow |
| -691.10M | -301.90M | -516.80M | -196.70M | -102.10M | Financing Cash Flow |
| 929.20M | -152.20M | -214.60M | 471.20M | 1.00B |
Shift4 Payments Technical Analysis
Negative
89.74
Price Trends
108.49
Negative
104.21
Negative
89.78
Negative
Market Momentum
-5.91
Positive
30.71
Neutral
22.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOUR, the sentiment is Negative. The current price of 89.74 is below the 20-day moving average (MA) of 104.56, below the 50-day MA of 108.49, and below the 200-day MA of 89.78, indicating a bearish trend. The MACD of -5.91 indicates Positive momentum. The RSI at 30.71 is Neutral, neither overbought nor oversold. The STOCH value of 22.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FOUR.
Shift4 Payments Risk Analysis
Shift4 Payments disclosed 62 risk factors in its most recent earnings report. Shift4 Payments reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Shift4 Payments Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $8.43B | 29.13 | 31.22% | ― | 29.86% | 128.19% | |
74 Outperform | $37.86B | 13.14 | 14.50% | ― | 10.06% | 38060.98% | |
73 Outperform | $67.35B | 17.63 | 20.00% | ― | 7.10% | 4.45% | |
73 Outperform | $24.83B | 16.27 | 6.94% | 1.00% | 4.68% | 63.39% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
51 Neutral | $36.90B | 49.13 | 4.65% | 2.07% | -17.38% | ― |
* Technology Sector Average
Performance Comparison
FOUR
Shift4 Payments
89.74
7.58
9.23%
FIS
Fidelity National Info
71.27
2.54
3.70%
GPN
Global Payments
100.77
-27.70
-21.56%
PYPL
PayPal Holdings
70.48
11.47
19.44%
XYZ
Block
60.00
-20.74
-25.69%
Shift4 Payments Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -28.59% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlights Shift4's record-breaking financial performance and strategic growth through the acquisition of Global Blue, alongside significant expansion in international markets and various sectors. Despite economic challenges and increased leverage due to the acquisition, the overall outlook remains strong and optimistic.Highlights
Record-Breaking Financial Performance
Q4 results set records across all major KPIs: end-to-end payment volumes increased 49% YoY to $47.9 billion, gross revenue less network fees increased 50% to $405 million, adjusted EBITDA increased 51% to $205.9 million, and adjusted free cash flow increased 78% to $134 million.
Significant Growth in Unified Commerce and Non-Profit Sectors
Unified commerce platform saw record growth with notable wins like University of Miami and Elon University. Non-profit sector volumes up 660% YoY in Q4 and 319% YoY for the year.
Strategic Acquisition of Global Blue
Shift4 announced the acquisition of Global Blue for $2.5 billion, enhancing global payment capabilities and unlocking $80 million in revenue synergies by 2027.
Expanding International Presence
Shift4 expanded operations to several new countries, including those in Latin America, with plans to enter Australia and New Zealand in early 2025.
Hospitality and Sports Sector Wins
Added major clients like Alterra Mountain Resorts and renewed agreement with Great Wolf Lodge. Also expanded in sports with New York Yankees and Dallas Mavericks.
Lowlights
Economic Challenges
Shift4 faced a challenging economic climate with record inflation and interest rate increases, which impacted consumer behavior.
Increased Leverage Due to Acquisition
The acquisition of Global Blue is expected to increase pro forma net leverage to approximately 3.6 times upon closing.
Company Guidance
During the Shift4 Fourth Quarter 2024 Earnings Call, the company delivered record-breaking results across all major KPIs. End-to-end payment volumes surged by 49% year-over-year to $47.9 billion. Gross revenue, less network fees, increased by 50% to $405 million, while adjusted EBITDA grew by 51% to $205.9 million. Notably, adjusted free cash flow rose by 78% to $134 million. The fourth quarter alone contributed 30% of the full-year gross revenue less network fees, illustrating significant growth momentum. The company also achieved positive operating leverage, with both adjusted EBITDA and adjusted free cash flow growing faster than revenue. Shift4 ended the year with a net leverage of 2.5 times and surpassed its medium-term guidance, with a three-year CAGR growth of 52% in volumes and 36% in gross revenue less network fees, despite economic challenges such as record inflation and interest rate hikes.Shift4 Payments Corporate Events
M&A TransactionsBusiness Operations and Strategy
Shift4 Payments Announces Acquisition of Global Blue
Positive
Feb 18, 2025
On February 16, 2025, Shift4 Payments entered into a Transaction Agreement to acquire Global Blue, with a definitive agreement announced on February 18, 2025. The acquisition aims to enhance Shift4’s unified commerce capabilities and expand its reach in the retail and hospitality sectors by integrating Global Blue’s technology solutions, focusing on tax refund and currency conversion. The transaction, valued at approximately $2.5 billion, includes a tender offer for all outstanding shares of Global Blue at a premium to its closing share price, and is expected to close by the third quarter of 2025, pending regulatory approvals and other customary conditions.
Executive/Board ChangesBusiness Operations and Strategy
Shift4 Payments Enhances Director Compensation Policy
Neutral
Feb 18, 2025
On February 16, 2025, Shift4 Payments’ Board of Directors approved changes to the Non-Employee Director Compensatory Policy, increasing annual cash retainers for various board committee roles and introducing equity-based awards. These changes are effective immediately and aim to enhance the company’s governance structure. Additionally, Seth Dallaire was appointed as a Class II director effective February 20, 2025, with a term ending at the 2025 annual stockholders meeting. Dallaire will participate in the revised compensation policy, indicating a strategic focus on leadership and governance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.