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.
Internationally, Shift4’s global expansion is rapidly scaling. Just two years ago, it operated on a single continent. Now it’s active across six. In Europe, more than 1,000 restaurants are going live every month. In Latin America, the company is onboarding new enterprise customers, supported by acquisitions like Vectron and Givex that bring local distribution and software capabilities. The recently announced Global Blue deal adds a significant growth lever, unlocking access to over $500 billion in luxury retail flow and positioning Shift4 to benefit from tax-free shopping and dynamic currency conversion. That transaction alone is expected to generate $80 million in revenue synergies by 2027. Importantly, strategic partners like Ant Financial and Tencent will remain on the cap table following the deal’s expected close in Q3, signaling continued global alignment.
On the capital allocation front, Shift4 remains disciplined. The company repurchased $63 million in stock in Q1, demonstrating confidence in its valuation. Debt related to acquisitions is manageable, covered by a combination of growing EBITDA and free cash flow, and the company maintains a robust cash position of $1.1 billion. This financial flexibility supports continued M&A and shareholder returns without overextending the balance sheet.
Compared to peers, Shift4 remains underappreciated. Toast has turned profitable but operates on razor-thin margins. Adyen offers premium infrastructure but trades at a full valuation. Shift4 sits comfortably in between—profitable, scaling quickly, and still mispriced by the market. The company has raised its full-year guidance, now projecting $1.66–1.73 billion in revenue excluding network fees and $840–865 million in adjusted EBITDA, while maintaining a volume outlook of $200–220 billion.
With operating leverage becoming more visible, a clean leadership transition, successful global expansion, and M&A synergies translating into real margin growth, Shift4 presents a compelling opportunity. Its fundamentals are outpacing sentiment, offering investors an attractive entry point before the market fully prices in its growth trajectory.
Shift4 Payments, Inc. (FOUR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held FOUR at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of FOUR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FOUR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
