Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Shift4 Payments Are Surging Today

By Bram Berkowitz - Mar 11, 2021 at 3:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An analyst at Bank of America double-upgraded the stock and significantly raised his price target.

What happened

Shares of the digital payments company Shift4 Payments (FOUR -2.58%) entered the final hour of trading up more than 16% after an analyst at Bank of America double-upgraded the stock. The company's stock price has more than doubled over the last six months.

So what

Serving more than 200,000 businesses, Shift4 is a reopening play because many of its clients are in some of the sectors hit hardest by the pandemic such as restaurants and hotels.

The company provides small businesses with point-of-sale services through contactless devices and QR code scanners, as well as online ordering systems for restaurants, payment security, and analytics.

Line with arrow on chart moving upward.

Image source: Getty Images.

Bank of America analyst Mike Colonnese double-upgraded Shift4 from underperform to buy and lifted his price target from $72 to $94. The stock currently trades at more than $96 per share.

"We believe FOUR is well positioned to see a sharp acceleration in end to end payment volume growth (FOUR's most important metric) beginning this month, the magnitude to which we do not believe is fully priced into the stock," Colonnese wrote in a research note.

Now what

Management is forecasting a strong rebound in 2021. Shift4 is expecting to generate end-to-end payment volume between $36 billion and $38 billion in 2021, which will drive gross revenue minus network fees of $450 million to $460 million.

That's considerably more than in 2020 when the company drove end-to-end payment volume of roughly $24.3 billion and gross revenue minus network fees of $323 million.

Additionally, the company has made several acquisitions lately including one that will help it with international growth and one that will help get business from sports stadiums and other entertainment venues, so the company has a good deal of momentum right now.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Shift4 Payments, Inc. Stock Quote
Shift4 Payments, Inc.
FOUR
$44.49 (-2.58%) $-1.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.