One-glance verdict
Undervalued
$182.70 our estimate vs market $41.01
Wall Street consensus: $61.15 (-66.5% lower than our fair-value estimate)
78% below our estimate, below the bear case
Fundamentals snapshot
Shift4 Payments, Inc.
FOUR · NYQ · Technology · Software - Infrastructure
Current price
$41.01
52-week range
$34.56 - $108.50
Market cap
$4.07B
Balance sheet
Distressed
1.77x Concerning
Net debt $4.11B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 6.5% last year.
- Reward Returns 9.9% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 5/10 years.
- Risk Net debt grew 243.6% over 3 years.
What this company does
Shift4 Payments, Inc.
Shift4 Payments provides the technology that allows businesses, especially restaurants and hotels, to accept credit cards and other digital payments. The company primarily makes money by taking a small fee from every transaction it processes for its clients. By bundling payment processing with other essential business software, Shift4 creates an ecosystem (a set of interconnected products that are hard for a customer to leave), which helps generate predictable revenue (income the company can reliably expect to earn over time).
How the company got here
Shift4 was started in 1999 by a 16-year-old founder, Jared Isaacman, in his parents' basement. Originally called United Bank Card, the company's goal was to make it easier and faster for small businesses to start accepting credit cards. Over the years, it grew by acquiring other payment and technology companies, eventually combining a software company with its payment services. The company went public on the New York Stock Exchange in 2020, becoming one of the first to ring the opening bell in person after the COVID-19 shutdown.
What it actually does
Shift4 provides the technology and services that allow businesses to accept all kinds of payments from customers, like credit cards, debit cards, and mobile wallets such as Apple Pay and Google Pay. Think of it as the all-in-one system a restaurant or hotel uses to handle payments, which includes the physical card reader, the software that runs on it, and the behind-the-scenes processing to move money from a customer's bank to the business's bank. Beyond just processing payments, Shift4 also offers tools to help businesses manage their daily operations, like point-of-sale (POS) systems, online ordering, and customer loyalty programs.
Payments-based Revenue
This is the company's largest source of income and comes from charging a small fee on every transaction it processes for a business. When you use your card at a hotel or restaurant that uses Shift4, the business pays Shift4 a small percentage of your total bill for making the payment happen securely and quickly. This segment is the core of Shift4's business, generating the vast majority of its revenue. The more sales its business customers make, the more money Shift4 earns.
Subscription and Other Revenue
Shift4 also makes money by selling software and services to businesses for a recurring fee, much like a monthly subscription. This includes their SkyTab point-of-sale (a modern cash register), business analytics tools, and e-commerce platforms that help businesses sell online. While this is a smaller part of the company's total revenue compared to payment fees, it's an important piece for creating a complete package for their customers. These services help businesses manage everything from inventory to online reputation, making them more likely to stick with Shift4 for all their needs.
What management is betting on now
The company is heavily focused on expanding its business internationally by acquiring companies in other countries and adapting its products for new markets. A key part of their strategy is to convince more businesses to use their complete, all-in-one payment system instead of just one piece of it, which is more profitable for Shift4. They are also targeting larger and more complex businesses like sports stadiums, casinos, and large hotel chains, where they can sell more of their specialized software and services. By bundling software with payment processing, they aim to become a critical technology partner for these businesses, not just a simple payment company.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$113.90M
FY2024 Q3
$180.10M
FY2024 Q4
$143.80M
FY2025 Q1
$95.10M
FY2025 Q2
$141.00M
FY2025 Q3
$165.40M
FY2025 Q4
$222.50M
FY2026 Q1
$128.00M
Revenue
$1.12B
Net income
$15.00M
Diluted EPS
—
Operating cash flow
$134.00M
Free cash flow
$128.00M
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Sources
Revenue
$1.19B
Net income
$40.20M
Diluted EPS
—
Operating cash flow
$223.70M
Free cash flow
$222.50M
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Sources
Revenue
$1.18B
Net income
$28.10M
Diluted EPS
—
Operating cash flow
$171.80M
Free cash flow
$165.40M
Fetching…
Sources
Revenue
$966.20M
Net income
$34.00M
Diluted EPS
—
Operating cash flow
$141.90M
Free cash flow
$141.00M
Fetching…
Sources
Revenue
$848.30M
Net income
$16.70M
Diluted EPS
—
Operating cash flow
$96.60M
Free cash flow
$95.10M
Fetching…
Sources
Revenue
$887.00M
Net income
$116.00M
Diluted EPS
—
Operating cash flow
$145.40M
Free cash flow
$143.80M
Fetching…
Sources
Revenue
$909.20M
Net income
$53.80M
Diluted EPS
—
Operating cash flow
$182.10M
Free cash flow
$180.10M
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Sources
Revenue
$827.00M
Net income
$39.20M
Diluted EPS
—
Operating cash flow
$116.10M
Free cash flow
$113.90M
Fetching…
Sources
Is it cheap or expensive?
Fair value $182.70 vs current price $41.01
Wall Street consensus is the average analyst price target: $61.15 (-66.5% lower than our fair-value estimate).
Our most-likely fair value is $182.70 a share — about 345.5% above today's price of $41.01, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $4.1B. Interest coverage 1.8x.
Net debt
$4.11B
Interest coverage
1.77x
Shift4 Payments, Inc.'s profit covers its interest bill about 1.8 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
FOUR
BASELINE
Shift4 Payments, Inc.
Total debt $4.58B Interest coverage 1.77x This is the baseline the peer rows are being compared against.
Total debt $20.16M Interest coverage -116.30x -100% vs FOUR This peer has almost no interest-payment cushion compared with FOUR.
What you should know
The case for and against FOUR
3 Rewards
1 Risk
Rewards
-
Revenue grew 6.5% last year.
-
Returns 9.9% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Net debt grew 243.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
47.14x
Forward P/E
6.06x
P/B
5.02x
P/S
0.91x
EV/EBITDA
9.84x
PEG ratio
0.26x
Profitability
How much profit each dollar creates
Gross margin
35.1%
Operating margin
5.0%
Net margin
2.6%
ROE
9.9%
ROA
3.7%
Health
Liquidity and balance-sheet strength
Debt / equity
2.57x
Current ratio
1.22x
Quick ratio
0.69x
Total debt
$4.58B
Total cash
$473.00M
Growth
How the business has been compounding
Revenue TTM
$4.45B
Revenue 5Y CAGR
32.2%
EPS TTM
0.87
EPS 5Y CAGR
0.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$671.40M
Free CF TTM
$624.00M
FCF margin
14.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—