Ricardo Pillai
4 min read
In This Article:
We came across a bullish thesis on Shift4 Payments, Inc. (FOUR) on Substack by Next 100 Baggers. In this article, we will summarize the bulls’ thesis on FOUR. Shift4 Payments, Inc. (FOUR)'s share was trading at $83.26 as of May 7th. FOUR’s trailing and forward P/E were 28.51 and 14.51 respectively according to Yahoo Finance.
A businesswoman using a digital tablet, making a payment using the company's payment processing technology.
Shift4 (FOUR) is quietly emerging as a fintech powerhouse, demonstrating exceptional operational execution despite headline distractions. The company just posted a strong first quarter, with payment volumes surging 35% year-over-year to $45 billion and revenue excluding network fees rising 40% to $369 million. EBITDA came in at $169 million, up 38%, with impressive 46% margins. Free cash flow was solid at $70.5 million, reflecting a healthy 42% conversion. The stock reacted positively, jumping 12% after earnings—a notable rebound following a period of underperformance driven by macro concerns such as tariffs, recession fears, and uncertainty surrounding founder Jared Isaacman’s transition out of the CEO role.
Isaacman, while stepping down as CEO to potentially take on a NASA mission, is far from exiting the company. He will remain Chairman and retain a 25% stake in the company’s Class A shares. More significantly, he is converting his super-voting Class B and C shares into Class A, thereby relinquishing control and aligning his voting power with other shareholders. This move enhances corporate governance and eliminates a longstanding overhang for institutional investors. Taylor Lauber, who was already overseeing operations, will step in as CEO, ensuring strategic continuity. The core execution team remains intact, and the operating strategy continues unabated.
Shift4’s business model is clearly gaining momentum. The company acquires vertical software companies with established merchant bases and integrates them with its own payment solutions, driving synergies through bundling and cross-selling. This strategy is delivering tangible results. Revel now has over 7,000 locations live on Shift4’s payments stack. Givex’s loyalty and gift card technology is now embedded into SkyTab, Shift4’s POS solution, and has already produced about 100 cross-sells. Eigen gateway customers are also transitioning to full-stack Shift4 payments. These efforts have already delivered $20 million in EBITDA synergies in Q1 alone, illustrating the power of its tightly integrated M&A flywheel.
