Valens Equity Weekly Insights - 2023 06 13
Shift4 Payments (FOUR) is simultaneously converting its existing clients to higher margin services while expanding its business into new verticals with large addressable markets in the payment processing market. Uniform Accounting confirms that the market isn't pricing this in. Considering management's strong execution and alignment to continue executing, equity upside is warranted.Shift4 has been rapidly gaining market share in the payment processing industry with its
gateway solutions for restaurants and lodging businesses, and it is converting its gateway clients into higher margin end-to-end clients at an accelerating rate. As the company continues to execute on this strategy and expand into new end markets, it should be able to grow and maintain stronger profitability than the market is currently pricing in.
Shift4's management is closely aligned with shareholders on long-term wealth creation. Also, management confidence in recent calls about expanding into new verticals, improving margins, and end-to-end customer conversion suggest management is executing on the company's strategic above market expectations
Management confidence on the Q1 earnings call about new vertical growth, end-to-end volumes, and free cash flow generation suggest the company is still growing and growing profitably.
FOUR
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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