Shift4 Payments (FOUR): A Bullish Case for Growth
This article summarizes a bullish thesis on Shift4 Payments, Inc. (FOUR), initially highlighted on Coughlin Capital’s Substack by Brian Coughlin. As of September 24th, Shift4 Payments, Inc. shares were trading at $80.93, with a trailing P/E of 31.50 and a forward P/E of 12.06, according to Yahoo Finance. Despite recent underperformance since May 2025, analysts continue to see significant upside for the stock.
Shift4: More Than Just a Payment Processor
Shift4 (FOUR) is a $7.5 billion market capitalization company exhibiting approximately 30% annual growth. It distinguishes itself as a software-led commerce platform, moving beyond the limitations of a standard “vertical processor.” The company projects reaching roughly $1 billion in free cash flow by 2027, leveraging operating leverage and a high-return-on-invested-capital model. The founder-led structure, with the CEO's continued involvement and open market share purchases, further strengthens the investment case.
Mispricing and Market Perception
The stock's current mispricing stems from investors broadly categorizing it within the competitive payments industry. However, Shift4’s value proposition is highly differentiated. Its integration into merchant workflows through point-of-sale, ordering, loyalty programs, and payments creates essential infrastructure. This embedding process establishes lasting customer relationships and grants significant pricing power.
Dominant Market Footprint
Shift4 boasts a dominant presence in several sectors. It processes payments for approximately one-third of U.S. sit-down restaurants, 40% of hotels, and almost three-quarters of professional sports stadiums. This scale underscores its critical role within major consumer-facing industries, where switching costs are high and reliability is crucial. By managing both the front-end software and back-end payment rails, Shift4 secures multiple monetization points throughout the value chain.
Investment Opportunity and Rerating Potential
Investors may be overlooking Shift4’s transformation into a global commerce platform with expanding reach, instead viewing it narrowly as a vertical payments processor. Shift4 offers an attractive investment opportunity with the potential for significant rerating, fueled by strong growth, embedded infrastructure, founder alignment, and a clear path to substantial free cash flow generation. A previously bullish thesis by Next 100 Baggers in May 2025, though not fully realized, echoes this sentiment, emphasizing the company's robust Q1 results, governance improvements, M&A synergies, and rapid international expansion.
