Shift4 Payments, Inc. (FOUR): A Bull Case Theory

We came across a bullish thesis on Shift4 Payments, Inc. on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on FOUR. Shift4 Payments, Inc.'s share was trading at $67.11 as of January 14th. FOUR’s trailing and forward P/E were 31.36 and 10.62 respectively according to Yahoo Finance.

Shift4 Payments, Inc. engages in the provision of software and payment processing solutions in the United States and internationally. FOUR may appear neutral at first glance given its exposure to less recession-resilient verticals such as hospitality and restaurants, especially amid negative sentiment across the payments sector following FISV’s recent outlook cut. However, this pessimism has created a compelling bullish setup where valuation, growth, and downside protection are unusually well aligned.

Despite being a key payments platform with strong structural tailwinds, FOUR already reflects a fully compressed multiple, limiting further downside. The stock trades at roughly 8x next-twelve-month EBITDA while delivering an estimated 43% growth rate, a level at which additional margin compression appears unlikely. This has been evident in recent trading, where FOUR has shown resilience and consolidation even as other high-growth equities experienced sharp single-day drawdowns.

The company’s free cash flow profile further strengthens the bull case. Management is guiding toward a $1 billion free cash flow run rate within the next two fiscal years, yet the stock currently trades at just 7.7x free cash flow. This valuation meaningfully understates the company’s fundamentals, particularly given expectations for 25%+ free cash flow growth over the next two to three years. A conservative re-rating to a 12x free cash flow multiple would imply a market capitalization of approximately $12 billion, representing roughly 100% upside from current levels.

Beyond valuation, FOUR benefits from operating in a payments ecosystem with an effectively expansive total addressable market. Its proven M&A capabilities, combined with strong organic execution, position the company to sustain 30%+ year-over-year growth. While macro concerns persist, the combination of a large margin of safety, accelerating cash generation, and long-term structural growth creates an attractive risk-reward profile skewed decisively to the upside.

Previously, we covered a bullish thesis on Shift4 Payments, Inc. (FOUR) by Next 100 Baggers in May 2025, which highlighted strong operational execution, M&A-driven synergies, and global expansion momentum. FOUR’s stock price has depreciated by approximately 19% since our coverage due to broader payments sector weakness and macro concerns. Oliver | MMMT Wealth shares a similar view but emphasizes valuation compression, free cash flow growth, and downside protection.

Shift4 Payments, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held FOUR at the end of the third quarter which was 55 in the previous quarter. While we acknowledge the potential of FOUR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.