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QS Research · Michael Burry's Scion Capital analyst template · 2006

Shift4 Payments, Inc. (FOUR)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: LONG

Conviction medium · base case +49% · downside -22% · upside +440%

Using TTM EBITDA of $921.0M (N10), net debt of $4.16B (N17,N18), and 78.96M shares (N5), a base case of 10x EV/EBITDA gives equity value ($921M*10 - $4.16B)/78.96M = $63.95 per share, +48.9% against the current $42.95 (N1); the downside case at 7.4x (lowest named profitable peer, S1) gives $33.63, only -21.8%; the upside case at 24.4x (GPN, S1) gives $231.91, +439.9%. The market is overly focused on thin common earnings and high leverage while ignoring strong TTM FCF of $573.0M (N15) and 34% revenue growth (S28); founder Isaacman is the only insider buying aggressively (S97), and analysts are 60% above the price (S8). The debt is high but serviceable, and the stock trades at the low end of peer EBITDA multiples (S1).

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Shift4 Payments earns most revenue from processing fees charged as a percentage of volume or per transaction, plus subscription revenue. Revenue grew from $560.6M in FY2018 to $4.18B in FY2025 while operating income swung from -$57.6M in FY2020 to $351.0M in FY2025. The company shifted from a U.S. partner-centric distribution model to include internal sales and enterprise, and expanded internationally via Finaro (2023) and Global Blue (Q3 2025), adding tax-free shopping.

  2. ✓ 2. Competitive advantage

    Shift4 Payments grew revenue from $766.9M in FY2020 to $4.18B in FY2025, and operating income turned positive in FY2022 and expanded to $351.0M in FY2025. The 10-K describes a highly competitive industry with large non-integrated and integrated payment processors, and notes TFS merchant contracts lack exclusivity and average three years, which weakens switching-cost durability. The company holds dozens of patents and key trademarks, but the sources do not quantify market share, pricing power, or returns on capital.

  3. ✓ 3. 10-Q takeaways

    Shift4's Q2 2026 10-Q shows strong top-line growth: gross revenue +34% YoY to $1,295m, gross revenue less network fees +51% to $624m, volume +22% to $61b. Reported net income fell to $24m from $41m on higher acquisition-related G&A, D&A, and interest; Adjusted EBITDA rose to $284m from $205m. Cash fell to $356m from $964m at year-end after $320m of buybacks and debt repayment; no full-year guidance was provided, but a $316m max acquisition was announced and expected to close in 2H26.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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