What does it do? Shift4 Payments (NYSE:FOUR) provides the technology for businesses to process payments — with a large portion of its sales from the restaurant/hospitality space. Here’s the company’s primary business model:
- Subscription fees: Recurring revenue from its payments software/hardware.
- Transaction revenue: Shift4 takes a percentage of transactions processed through its network.
Catch me up: Shift4 went public on June 4, 2020. Since then, it’s up 166% but COVID hit the company hard, as it shut down the majority of its customers (i.e. restaurants, hotels, casinos).
Luckily, that didn’t stop its momentum. In 2021, Shift4 announced:
- A deal to become the payment provider for BetMGM — an online gaming/sports betting platform.
- The acquisition of VenueNext, a payments solutions provider for venues and theme parks.
The catalyst: Two weeks ago, Shift4 revised its estimated second-quarter sales to $345-350m — up from a previously forecasted $292m. Despite the upwards projection, Shift4’s stock barely moved.
2021 should have been a tough year for the company. Sales fell 20% in the second quarter of 2020 but then grew in each of the proceeding quarters.
And now, Shift4 is returning to growth mode as sales recover for its hospitality customers.
- Important dates: Earnings on Thursday Aug 5
- Close competitor: Lightspeed (NYSE:LSPD)
