Shift4 Payments is the IBD Stock Of The Day in the wake of a big August rally following its second-quarter earnings beat and raised 2024 guidance. Shift4 stock has approached an entry point from a cup-with-handle base.
On the stock market today, Shift4 stock rose a fraction to close at 81.15. FOUR stock has gained 9.2% in 2024.
From a technical view, Shift4 has forged a cup-with-handle base with an 83.64 entry point. The stock briefly rose above the buy point Monday before ceding gains.
Shares broke a downward trendline on Friday, possibly a bullish signal.
Shift4's relative strength line has improved significantly, though it is not quite at an all-time high.
Shift4 Stock: Acquisition Spree
The financial technology company's acquisition spree continued on Monday. It announced the acquisition of Givex, a provider of gift cards, loyalty programs and point-of-sale solutions.
Shift4 also acquired point-of-sale company Revel Systems for $250 million in June.
The Allentown, Pa.-based digital payments processor garners most of its revenue from customers in the hotel and restaurant industries as well as casinos. Shift4 has expanded into sports stadiums, airlines and charities, as well as food and beverage companies.
Amid intensified competition in the restaurant sector, the company has expanded internationally.
After exploring strategic options in early 2024, Shift4 ended talks to be acquired, analysts say.
When reporting Q2 earnings on Aug. 8, Shift4 raised its full-year 2024 outlook for revenue and earnings before interest, taxes, depreciation and amortization. Management pointed to a large payment volume backlog.
"Shift4 disclosed that it has $25 billion of contract value that will soon be implemented in the second half and many of the large stadium wins of recent quarters that have already been implemented will only start delivering meaningful volumes in the fall season when sporting events pick up," Morgan Stanley analyst James Faucette said in a report. "This, plus distribution improvements made via acquisitions of Finaro, Vectron and Revel, is supporting meaningful international ramp in Europe."
Shift4 Stock: Technical Ratings
Meanwhile, Shift4's Q2 adjusted profit rose 30% to 96 cents a share. Revenue climbed 30% to $827 million.
FOUR stock holds an IBD Composite Rating of 94 out of 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
FOUR stock owns an Accumulation/Distribution Rating of A-. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
Founder, CEO Holds Voting Power
Shift4 went public in June 2020. Its buying spree includes the $575 million acquisition of Finaro, a pan-European e-commerce platform. Also, Shift4 purchased sports stadium payment processor Appetize for $100 million.
"Strategic acquisitions like Revel and Vectron continue to set the company up with more conversion and cross-selling opportunity, as well as enhanced distribution in new geographies," Susquehanna analyst James Friedman said in a recent report.
One bright spot is strong demand for the SkyTab restaurant payment system. In the restaurant business, Shift4 competes with Toast, Block's Square business and Fiserv's Clover.
Founder and Chief Executive Jared Isaacman controls more than 80% of Shift4's voting power and 35% of the company.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
