QS Research · Michael Burry's Scion Capital analyst template · 2006
Shift4 Payments, Inc. (FOUR)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -2% · downside -39% · upside +75%
The market is pricing FOUR as a levered, acquisition-heavy payments company with a revenue-line problem, not as a business generating $624M TTM FCF (18.9% FCF yield) at 8.7x EV/EBITDA. At today's 8.7x on $940M TTM EBITDA, EV is $8.18B; less $4.89B net debt and $70M leases gives about $3.22B equity versus $3.29B market cap, about -2%. Downside at 7.4x gives $6.96B EV and about $2.00B equity (-39%), while upside at 11.4x gives $10.72B EV and about $5.76B equity (+75%). The gap is real, but $6.13B debt, $52M common net income after $63M preferred claims and pricing pressure keep this a watch, not a long.
Key numbers
- Share price: $43.96
- Market cap: $3.29B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $4.92B
- EV / EBITDA (TTM): 8.7x
- P/E (TTM): 63.4x
- Price / book: 2.27x
The 15 boxes
- ✓ 1. Long-form business notes
Shift4's FY2025 revenue was $4.18B versus $766.9M in FY2020, with FY2025 operating income of $351.0M and operating cash flow of $634.0M. The company makes most of its money from processing fees plus subscriptions, sold through internal sales and ISV/VAR partners; the Q3 2025 Global Blue merger added TFS and international travel-retail exposure. The oldest FY2020 10-K shows a U.S. partner-centric payments platform with over 7,000 software partners and over 185,000 SMB customers, while the latest 10-K describes a broader global payments/technology/TFS platform.
- ✓ 2. Competitive advantage
Shift4 competes against named, mostly larger payment processors and integrated software rivals, and its own filings describe a business defended by domain expertise, distribution scale, breadth and patents rather than by contractual lock-in: merchant agreements carry no exclusivity clauses and average about three years. The one structural edge the documents describe beyond brand and IP is licensing — TFS refund operations run on local licenses/government agreements in 19 named jurisdictions and over 35% of TFS refund locations sit in airports under three-year, non-exclusive concessions. The six-year record shows operating income moving from -$57.6M (FY2020) to $351.0M (FY2025) with $10.0M of FY2025 capex against $634.0M operating cash flow, but the return record is muddied by acquisition amortization ($432.0M D&A in FY2025) and by gaps between pre-tax and net-to-common income the sources do not explain.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue grew 12% to $1,319M, with payments-based revenue +16% and TFS +7% while subscription/other fell 10%; gross revenue less network fees rose 10% to $648M and Adjusted EBITDA was $310M. Nine-month revenue rose 25% to $3,735M, gross revenue less network fees rose 33% to $1,821M and Adjusted EBITDA was $828M, but net income fell to $76M from $94M with higher interest expense. Cash was $1,242M at Sep 30 2026; nine-month operating cash flow was $418M and the company repurchased $511M of Class A stock. The provided excerpts give no numeric Q4/FY2026 guidance and no detailed 10-Q risk-factor changes.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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