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Shift4: 20% sustainable growth, 12x EV/EBIDA

  • Writer: Abacus Research
    Abacus Research
  • Oct 11, 2024
  • 1 min read

Shift4 is a founder led payments company. In a highly dynamic industry, Shift4 has shown its ability to outgrow peers and increase market share.


We think that the market has got FOUR wrong, trading it at 12xEV/EBITDA (2025), which in our opinion should be >16x, for a 20%+ EBITDA growth company.

  • We think the organic growth of the business is sustainable at 15%+.

  • Plus, there is a sustainable M&A model where Shift4 can acquire at 4x EBITDA post synergies.


In our opinion, Shift4 has an opportunity large enough to grow gross profit at a 20-30% CAGR over the next three years.

  • This will be a mix of 10-15% organic and 10-15% acquisitions.

  • EBITDA growth should be inline to slightly higher, given inherent operating leverage in the business.


Potential Upside:     $164 (+75%)

Sensible Downside: $92 (i.e. limited downside)


 
 
 

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