Shift4 (FOUR)

Payment processing company Shift4 Payments (NYSE:FOUR) met Wall Streets revenue expectations in Q3 CY2025, with sales up 29.4% year on year to $1.18 billion. Its non-GAAP profit of $1.47 per share was in line with analysts’ consensus estimates.

Company Overview

Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE:FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.

Payment processors facilitate transactions between merchants, consumers, and financial institutions. Growth comes from e-commerce expansion, declining cash usage globally, and value-added services beyond basic processing. Headwinds include margin pressure from merchant negotiating power, rapid technological change requiring investment, and emerging competition from technology companies entering the payments ecosystem.

Shift4 Payments competes with traditional payment processors like Chase Paymentech, Elavon, FIS, Fiserv, and Global Payments, as well as integrated payment providers such as Adyen, Lightspeed POS, Shopify, Square, and Toast. In the hospitality gateway space, its main competitors include Elavon and FreedomPay.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Shift4’s revenue grew at an incredible 38.6% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Shift4’s annualized revenue growth of 27.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Shift4’s year-on-year revenue growth of 29.4% was excellent, and its $1.18 billion of revenue was in line with Wall Street’s estimates.

The aggregate volume of transactions and loan originations processed by financial firms directly impacts their revenue and are fundamental to understanding their growth trajectories.

Shift4’s volumes have grown at an annual rate of 53.1% over the last five years, much better than the broader financials industry and faster than its total revenue. When analyzing Shift4’s volumes over the last two years, we can see that growth decelerated to 42.2% annually.

Shift4’s volumes punched in at $54.7 billion this quarter, beating analysts’ expectations by 1.7%. This print was 25.7% higher than the same quarter last year.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Payment Processing companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

The pre-tax profit margin includes interest because it's central to how financial institutions generate revenue and manage costs. Tax considerations are excluded since they represent government policy rather than operational performance, giving investors a clearer view of business fundamentals.

Over the last four years, Shift4’s pre-tax profit margin has fallen by 13.9 percentage points, going from negative 7.4% to 6.5%. However, fixed cost leverage was muted more recently as the company’s pre-tax profit margin was flat on a two-year basis.

Shift4’s pre-tax profit margin came in at 5.1% this quarter. This result was 28.1 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Shift4’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Shift4’s EPS grew at an astounding 40.2% compounded annual growth rate over the last two years, higher than its 27.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q3, Shift4 reported adjusted EPS of $1.47, up from $1.04 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Shift4’s full-year EPS of $4.99 to grow 22.8%.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, Shift4 has averaged an ROE of 13.3%, healthy for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Shift4 has a decent competitive moat.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Shift4 currently has $4.79 billion of debt and $1.61 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 3.1×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 3.5× for a financials business.

It was encouraging to see Shift4 beat analysts’ transaction volumes expectations this quarter. Despite this volume strength, revenue and EPS met expectations. The stock traded up 5.7% to $71 immediately after reporting.

Updated: December 3, 2025 at 11:39 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Shift4.

Shift4 is truly a cream-of-the-crop financials company. For starters, its revenue growth was exceptional over the last five years. On top of that, its astounding EPS growth over the last five years shows its profits are trickling down to shareholders, and its transaction volume growth was exceptional over the last five years.

Shift4’s P/E ratio based on the next 12 months is 11.6x. Looking at the financials space today, Shift4’s qualities as one of the best businesses really stand out, and we like it at this price.

Wall Street analysts have a consensus one-year price target of $95.43 on the company (compared to the current share price of $70.55), implying they see 35.3% upside in buying Shift4 in the short term.