Shares of the payment processor Shift4 Payments (FOUR 11.80%) had dropped more than 16% in the final hour of trading after the company recently reported earnings results for the first quarter of this year.
Shift4 Payments, which provides small businesses with point-of-sale services through contactless devices and QR code scanners, reported a net loss of $51 million in the quarter, or a loss of $0.62 per share. That's down from a loss of $5.1 million in the first quarter of 2020. Total revenue in the quarter surpassed $239 million, up from just shy of $200 million in the first quarter of 2020.
The loss of $0.62 per share missed analysts' estimates by $0.43 per share, while revenue beat expectations set by analysts.
"During Q1, we experienced a risk loss due to a multi-location specialty retailer that abruptly closed as a result of business failure," CEO Jared Isaacman said in a letter to shareholders. "This business was an unfortunate casualty of the pandemic and the only notable risk charge in my 21-year history with the company."
Despite the recent dip, I still see strong potential in Shift4, as this is a reopening play and the company serves some of the hardest-hit businesses in the pandemic such as restaurants and hotels.
Management at Shift4 also raised the company's full-year guidance for 2021 and now projects end-to-end payment volume between $44 billion and $46 billion, up from $36 to $38 billion earlier this year. This will translate into higher revenue and earnings.