50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Shift4 Payments retains Outperform rating amid CEO's NASA nod

Published 04/12/2024, 21:02
FOUR
-

The investment firm anticipates that a potential acquisition of Shift4 Payments could be financially beneficial for the acquiring parties. They estimate that a deal would be slightly accretive to the earnings per share (EPS) for financial institutions (FI) and could yield an internal rate of return (IRR) in the mid-teens or higher for a leveraged buyout (LBO), assuming a purchase price between $130-$140, which is about 20 times the projected 2026 free cash flow (FCF).

The analyst's outlook remains positive on Shift4 Payments' stock, emphasizing the company's robust management and the prospect of a value-enhancing acquisition. The company has demonstrated strong financial performance with revenue growth of 31.4% and healthy EBITDA of $457.4 million in the last twelve months.

Despite the initial market reaction to the CEO's potential departure for NASA, the firm's assessment underlines a belief in the company's ongoing strategy and potential future corporate developments.

The analyst's outlook remains positive on Shift4 Payments' stock, emphasizing the company's robust management and the prospect of a value-enhancing acquisition. The company has demonstrated strong financial performance with revenue growth of 31.4% and healthy EBITDA of $457.4 million in the last twelve months.

Despite the initial market reaction to the CEO's potential departure for NASA, the firm's assessment underlines a belief in the company's ongoing strategy and potential future corporate developments. For deeper insights into Shift4 Payments' valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.

The investment firm anticipates that a potential acquisition of Shift4 Payments could be financially beneficial for the acquiring parties. They estimate that a deal would be slightly accretive to the earnings per share (EPS) for financial institutions (FI) and could yield an internal rate of return (IRR) in the mid-teens or higher for a leveraged buyout (LBO), assuming a purchase price between $130-$140, which is about 20 times the projected 2026 free cash flow (FCF).

The analyst's outlook remains positive on Shift4 Payments' stock, emphasizing the company's robust management and the prospect of a value-enhancing acquisition. Despite the initial market reaction to the CEO's potential departure for NASA, the firm's assessment underlines a belief in the company's ongoing strategy and potential future corporate developments.

In other recent news, Shift4 Payments has been making headlines with significant financial developments and leadership changes. The company reported a 50% year-over-year growth in net revenue in the third quarter, with a 51% increase in adjusted EBITDA, according to DA Davidson. The firm subsequently raised its price target on Shift4 Payments stock from $118 to $126 while maintaining a Buy rating.

Simultaneously, the company's CEO and Chairman, Jared Isaacman, has been nominated by President-elect Donald Trump to serve as the Administrator of NASA. This unexpected nomination could lead to Isaacman stepping down from his executive role at Shift4 Payments, raising questions about future leadership. Analysts from KBW and DA Davidson have both expressed understanding and anticipation of the potential changes in management.

In addition, Piper Sandler upgraded Shift4 Payments' stock price target from $93 to $120, maintaining an Overweight rating due to the company's higher than expected EBITDA margin. RBC Capital Markets also raised its price target from $94 to $116, highlighting the company's significant growth in its payment volume backlog.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.