Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Shift4 Payments Are Falling Today

By Bram Berkowitz - May 6, 2021 at 3:42PM

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

The company recently reported earnings for the first quarter of the year, which missed expectations.

What happened

Shares of the payment processor Shift4 Payments (FOUR -6.09%) 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.

So what

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. 

Person holding head and watching line with arrow move down

Image source: Getty Images.

"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."

Now what 

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.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Shift4 Payments, Inc. The Motley Fool has a disclosure policy.

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.
$48.26 (-6.09%) $-3.13

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

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.