FINX - Shift4 Payments: Undervalued But The Prolonged Search For A Buyer Makes It A Pass

2024-06-27 17:31:38 ET

Summary

• From a pool of sell-side analysts' price targets and relative valuation against other integrated payment providers, FOUR is undervalued.
• M&A has been a massive company growth component, paying more than $1 billion in total considerations since 2021 and making goodwill account for a third of their total assets.
• Adding the complexity of integrating all the acquisitions, the prolonged process of finding a buyer for themselves, and seeing peers such as Toast performing better, makes them a hold.

Over the past year, Shift4 Payments (NYSE : FOUR ) has closely matched the performance of the Global X FinTech ETF ( FINX ) by approximately 17.9%. In TTM Q1 24, the company generated $2,725.2 million in revenue and a net income of $92 million. Historically, net income has been reduced significantly by its depreciation and amortization expenses, as cash flow from operations sat higher at $365.6 million . ...

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