- Despite its robust revenue growth at a 4-year average of 38%, FOUR’s gross margins had declined from 25.1% in 2018 to 20.36%.
- We analyzed its declining take rate (2.9%in 2021) and we forecasted it to continue to decline to 2.2%, in line with its competitors' average.
- Though, we expect that FOUR's costs, including network fees and cost of sales, will not hurt its margins as it grew below its payment volume growth (45.6%).
- However, as FOUR stock has declined by 67% in the past 1 year, it has an upside of 17% based on the lowest end of the analyst consensus price target.
For further details see:
Shift4 Payments: Compressed Margins Despite Robust Growth