Can Shift4 Dominate Crypto Payments?

Key Takeaways

• Shift4’s stock has more than doubled over the past 12 months, as it reports success in new verticals with its core POS product;

• Crypto payments launch could be a further growth driver over the long term; Deloitte indicates that nearly two-thirds of merchants believe their customers are interested in using crypto;

• Compared to two established competitors, Shift4’s valuation looks particularly strong based on revenue growth, though it could lag behind one key competitor on earnings growth.

1.   Shift4 in Uncharted Territory

Shift4 [FOUR] is a payments company founded in 1999 by its CEO, Jared Isaacman, when he was 16 years old.[1]

It has established a position as a core provider of point of sale (POS) software for businesses that are running multiple systems from different providers. This is particularly pertinent to the hospitality industry; restaurants form the core of Shift4’s customer base.[2]

Isaacman is clear that his approach involves offering a premium service, going beyond the mere functionality that many providers offer.

“Clearly, there are winners and losers in payments. The losers provide little value beyond the approval and decline of a credit card transaction and, as a result, there is little they can charge for that service. The winners are bringing together software and payments to deliver a more powerful commerce experience and they can typically charge more for the value being delivered.” — Jared Isaacman, CEO, Shift4 Payments, Q2 2024 shareholder letter[3]

Shift4 listed in June 2020, and Isaacman is now a billionaire — having started the business with a $10,000 gift from his grandfather.[4] An accomplished pilot, he was part of the first-ever civilian spacewalk in September, floating outside a SpaceX capsule for 10 minutes.

Shift4’s share price gained 35.55% in the year to date, and 170.38% over the last 12 months.

Created with TradingView

In all, since its IPO, Shift4’s share price has gained 200.45%. Here, we will examine the drivers that have led Shift4’s stock to lift off over the past year, and examine the strategy that Isaacman believes will power its future growth.