Buy Rating Affirmed for Shift4 Payments on Strong Growth, Profitability, and Strategic Acquisitions

D.A. Davidson analyst Peter Heckmann reiterated a Buy rating on Shift4 Payments (FOUR – Research Report) on April 26 and set a price target of $96.00.

Peter Heckmann has given his Buy rating due to a combination of factors including Shift4 Payments’ strong growth and profitability margins, alongside its reasonable valuation. Heckmann highlights the company’s impressive organic growth rate, which exceeds 20%, and robust EBITDA margins that are over 30%. Despite recent stock price declines, he considers the company’s trading multiple, sub 8.5x EV/FWD EBITDA, to be attractively low for its financial performance. This perspective suggests that the stock is undervalued and presents a buying opportunity for investors.

In addition, Heckmann is confident in Shift4 Payments’ execution in the upcoming year, noting key developments such as the closure of the Finaro acquisition and the integration of the SpotOn Tech asset, which are expected to contribute positively to the company’s financials in 2024. He also anticipates that net leverage will be manageable by year-end. The belief that the market has overly penalized the stock, the expectation of the company to meet or exceed guidance, and the potential for further organic growth and strategic acquisitions to drive performance underpin Heckmann’s conviction in his Buy rating.

In another report released on April 15, Goldman Sachs also maintained a Buy rating on the stock with a $80.00 price target.

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Shift4 Payments (FOUR) Company Description:

Shift4 Payments Inc is provider of integrated payment processing and technology solutions. The company offers software providers a single integration to an end-to-end payments offering, a powerful gateway and a robust suite of technology solutions (including cloud enablement, business intelligence, analytics, and mobile) to enhance the value of their software suites and simplify payment acceptance. The Shift4 Model is built to serve a range of merchants from small-to-medium-sized businesses to large and complex enterprises across numerous verticals, including lodging, leisure, and food and beverage.