FOUR: Bearish Signal for Shift4 Payments, Inc.

Shift4 is a leading independent provider of software and payment processing solutions, powering transactions for businesses across diverse industries, from small local shops to multinational enterprises. The company's core offering is its payments platform, a suite of integrated products and services for in-store, online, and mobile channels. This includes end-to-end payment processing, merchant acquiring services, an omni-channel gateway, eCommerce capabilities, integrated POS solutions, and risk management tools. Shift4 also offers technology solutions like 'SkyTab POS', 'SkyTab Mobile', 'SkyTab Venue', 'Lighthouse', 'The Giving Block', and 'Shift4Shop'. Shift4 distributes its services through internal sales teams and a network of partners, including ISVs and VARs. Shift4 differentiates itself by providing a unified solution integrating hardware, software, and payment processing, aiming to simplify commerce and enhance the customer experience.

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FOUR's technical outlook is decidedly bearish. The stock price has experienced a significant downtrend over the past 90 days, plummeting from highs around $107 to the current price near $66.785. This sharp decline places the price well below both the 50-day SMA (80.88) and the 200-day SMA (91.45), confirming a strong bearish trend. Momentum indicators support this bearish sentiment. The RSI_14 is at 32.34, indicating oversold conditions, but not at a level that would typically indicate an immediate bounce. The MACD is negative (-3.20) and diverging further from its signal line, reinforcing the downward momentum. The ADX is elevated at 37.84, suggesting a strong trend is in place, and given the price action, this is a strong *downward* trend. The STOCHk and STOCHd are also very low, suggesting continued downward pressure. The recent price action confirms this, with the price consistently making lower lows. The ATR is elevated, suggesting high volatility. Given these signals, the stock is likely to continue its downward trajectory over the next 1-3 months.

Shift4 Payments' MD&A reveals a company in a period of growth and transition. For the three months ended June 30, 2025, `Gross revenue` increased by 17% to $966.2 million, driven by a 15% increase in `Payments-based revenue` to $868.5 million and a 37% increase in `Subscription and other revenues` to $97.7 million. The increase in `Payments-based revenue` was fueled by a $10.1 billion, or 25%, increase in volume. For the six months ended June 30, 2025, `Payments-based revenue` increased by 15%, or $213.3 million. The company is actively pursuing acquisitions, including Smartpay and Global Blue, financed in part by new debt facilities. This activity has significantly impacted the company's debt profile, with annualized interest expense projected to be approximately $243 million. Net cash provided by operating activities for the six months ended June 30, 2025, was $238.5 million. The company repurchased 1,834,895 shares of Class A common stock for $148.2 million during the six months ended June 30, 2025. While the company believes that its 'cash and cash equivalents and future cash flow from operations will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months', the increased debt and acquisition-related expenses warrant close monitoring.

Shift4's Q2 2025 earnings call projects a moderately bullish outlook, driven by strong performance metrics and strategic acquisitions. CEO Taylor Lauber highlighted significant accomplishments, stating the 'Shift4 team has accomplished more since our last earnings call than we have in entire years prior.' Payment volumes increased by 25% year-over-year to $50 billion, with gross revenue less network fees up 29% to $413 million. Adjusted EBITDA grew 26% to $205 million, achieving a margin of 49.6%. The acquisition of Global Blue closed in early July and is expected to contribute $300 million in gross revenue less network fees and $125 million of adjusted EBITDA in the back half of the year. The company is raising its full-year guidance, now projecting gross revenue less network fees between $1.965 billion and $2.035 billion, and adjusted EBITDA between $965 million and $990 million. While maintaining a positive outlook, management acknowledged the importance of integrating Global Blue and continuing international expansion. They are 'tracking towards the most likely medium-term guidance scenario' presented at the Analyst Day, which calls for 30% plus gross revenue growth and 30% EBITDA growth.

FOUR's financial performance presents a mixed picture. Revenue has shown some volatility, starting at $707.4M in Q1 2024, peaking at $909.2M in Q3 2024, and then declining to $0 in Q2 2025, which is a significant cause for concern and likely due to missing data. The gross profit ratio has fluctuated, ranging from 0.265 in Q1 2024 to 0.323 in Q4 2024 before ultimately dropping to 0 in Q2 2025. Operating cash flow has been generally positive, with $141.9M reported in the latest quarter (Q2 2025), but this follows a period of variability. Total debt has increased substantially from $1.777B in Q1 2024 to $3.769B in Q2 2025, indicating a significant increase in leverage. Net income also shows substantial fluctuation, with $70.3M in Q2 2025, following $16.7M in Q1 2025. Overall, the increase in debt and revenue volatility, particularly the latest data point, raise concerns about the company's financial stability and future performance.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.