Shift4 Payments edged by earnings estimates and beat on revenue for its third quarter, and raised one metric in its full-year outlook. But Shift4 stock plunged Monday as it prepared to host an investor day.
For the quarter ending Sept. 30, Shift4 earnings rose 65% on an adjusted basis from a year earlier to 44 cents. Net revenue climbed 33% to $196.7 million.
Analysts estimated earnings of 43 cents a share on revenue of $193.1 million, according to FactSet.
"Fueling Q3 sales growth was a 53% increase in end-to-end payments volume," EvercoreISI analyst David Togut said in a note to clients.
Shift4 stock was up before the market open. But it reversed sharply and dropped 7.2% to close at 37.27.
Shift4 Stock: Investor Day
For full-year 2022, Shift4 said it expects earnings before interest, taxes, depreciation and amortization in a range of $275 million to $280 million, up from earlier guidance of $255 million to $265 million.
Also, the company hosts an investor day at 1 p.m. ET today.
"FOUR introduced medium-term outlooks through 2024," Togut said. That included $160 billion in end-to-end volumes with at least 50% compound annual growth rate.
There was also $3.5 billion in gross revenue and $1.15 billion in gross revenues, less network fees, with at least 30% compound annual growth, he added.
Goldman Sachs analyst Will Nance said in his note to clients: "Shift4's guidance implies roughly 4% higher net revenue (however with volume roughly in ine and gross revenues below the street)."
He added: "Thus while we believe today's results are encouraging, we think (FOUR stock) performance will come down to the commentary on the earnings call and any forward looking comments into 2023."
The digital payment processor launched its initial public offering in June 2020 with Shift4 stock priced at 23.
Rivals Include Clover, Square, Toast
Shift4 gets most of its revenue from customers in the hotel and restaurant industries as well as casinos. It has expanded into sports stadiums, airlines and charitable giving as well as food and beverage companies. Satellite broadband firm Starlink is a new customer.
It competes with Clover, owned by Fiserv, Square-parent Block, Toast and others.
To help drive international expansion, Shift4 in early 2022 announced the acquisition of Finaro for $575 million. Finaro is a Pan-European cross-border e-commerce platform with banking licenses in Europe, Japan and Hong Kong. The Finaro purchase is expected to close by year end.
Heading into the earnings report, Shift4 stock had retreated 30% thus far this year.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
