Shift4 (FOUR)

Payment processing company Shift4 Payments (NYSE:FOUR) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 34% year on year to $1.19 billion. On the other hand, next quarter’s revenue guidance of $547.5 million was less impressive, coming in 51.6% below analysts’ estimates. Its non-GAAP profit of $1.60 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.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Shift4’s 40.4% annualized revenue growth over the last five years was incredible. 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 27.7% 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 34% was wonderful, and its $1.19 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 35.5% year-on-year decline in sales next quarter.

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.

This is because for financials businesses, interest income and expense should be factored into the definition of profit but taxes - which are largely out of a company's control - should not.

Over the last five years, Shift4’s pre-tax profit margin has fallen by 19.5 percentage points, going from negative 5.6% to 4.7%. 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 5.6% this quarter. This result was 8.4 percentage points worse 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 shorter period to see if we are missing a change in the business.

Shift4’s EPS grew at an astounding 36.1% compounded annual growth rate over the last two years, higher than its 27.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q4, Shift4 reported adjusted EPS of $1.60, up from $1.35 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 $5.24 to grow 21.6%.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, Shift4 has averaged an ROE of 14.4%, 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.

Shift4 reported $964 million of cash and $4.56 billion of debt on its balance sheet in the most recent quarter.

As investors in high-quality companies, we primarily focus on whether a company’s profits can support its debt.

With $969.7 million of EBITDA over the last 12 months, we view Shift4’s 3.7× net-debt-to-EBITDA ratio as safe. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We struggled to find many positives in these results. Its full-year revenue guidance missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.6% to $56.43 immediately after reporting.

Updated: February 26, 2026 at 7:47 AM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

There are numerous reasons why we think Shift4 is one of the best financials companies out there. First of all, the company’s 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 expanding pre-tax profit margin shows the business has become more efficient.

Shift4’s P/E ratio based on the next 12 months is 9x. Looking at the financials space today, Shift4’s qualities as one of the best businesses really stand out, and we’re pounding the table at this bargain price.

Wall Street analysts have a consensus one-year price target of $88.39 on the company (compared to the current share price of $56.43), implying they see 56.6% upside in buying Shift4 in the short term.