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Why Shares of Shift4 Payments Are Surging Today

By Bram Berkowitz – Nov 10, 2021 at 1:04PM

Key Points

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The company reported earnings results and an exciting new partnership.

What happened

Shares of Shift4 Payments (FOUR -0.29%) jumped nearly 20% as of 12:15 p.m. EST after the payment processor reported earnings results for the third quarter of the year and a new partnership.

So what

Shift4 reported a loss per share of $0.17 on total revenue of nearly $378 million, both numbers that missed on analyst estimates.

Shift4 also left most of its previous guidance, including end-to-end payment volume, total revenue, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), unchanged. The company raised full-year guidance for gross revenue minus network fees.

But perhaps the bigger news driving the stock is Shift4's announcement today of a new partnership with SpaceX's Starlink that the company estimates could be worth $100 billion in subscription payments long-term.

"SpaceX Starlink is a cornerstone, global client opening up opportunity throughout the globe," the company said in its earnings presentation. "By servicing the business globally, Shift4's TAM [total addressable market] expands in all the verticals we serve."

Green squiggly line moving upward.

Image source: Getty Images.

Now what

Shift4's stock has been volatile this year, as the company serves a lot of businesses in the restaurant and lodging industries, both of which are competitive in the payments space and have been dealing with struggles related to the pandemic.

But the company should continue to benefit as the economy recovers, and the Starlink partnership certainly represents a huge opportunity.

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.

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