Tuesday's IBD 50 Stocks To Watch pick is payments leader and SpaceX partner Shift4, which is pulling back to a support level ahead of its earnings report. That makes the payments leader one of the best ideas to watch right now.
Allentown, Pa.-based Shift4 is a digital payments processor that earns most of its revenue from customers in the hotel and restaurant industries. It also has a hand in casinos. More recently, Shift4 has expanded into sports stadiums, airlines and charities, as well as food and beverage companies.
A large part of its strategy has been acquisitions. Just last month, the company announced it acquired Givex, a provider of gift cards, loyalty programs and point-of-sale solutions. Back in June, Shift4 acquired point-of-sale company Revel Systems for $250 million.
In early October, Barclays analyst John Coffey initiated coverage of Shift4 with an overweight rating and a price target of 120.
"We believe Shift4's 25%-plus net revenue growth rate and 49% EBITDA margins, plus an exclusive global partnership with SpaceX's Starlink broadband service, can reward investors over the long term," Coffey said.
On Aug. 8, Shift4's second-quarter earnings and revenue topped Wall Street targets. Shift4 reported earnings of 96 cents per share on gross revenue of $827 million.
Third-quarter results are due out Nov. 12. Wall Street expects the company to earn $1.06 per share.
For the full year, analysts anticipate the company's earnings will grow 31% to $3.74 per share, with an increase of 28% in 2025, per IBD MarketSurge.
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Shift4 Stock Pulls Back To Support Level
Following a Sept. 13 breakout past a cup-with-handle entry at 84.26, shares are pulling back to their 10-week moving average. A decisive rebound from here would place the stock in a new buy area.
In mid-October, the stock's relative strength line hit its latest high, confirming Shift4 stock as a market leader. That indicator is holding near those highs during the recent stock market volatility, a sign of big market outperformance.
Due to long-term earnings strength and strong price action this year, Shift4 stock boasts a near-ideal 98 IBD Composite Rating, according to IBD Stock Checkup.
Further, market risk has elevated in recent weeks, and investors should be looking to maintain an exposure level of 60%-80%. And Shift4 stock is among the best ideas.
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Other Stocks To Keep An Eye On
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Trade Desk | 121.44 | Tight area | |
| Nvidia | 140.76 | Consolidation | |
| Hims & Hers Health | 23.74 | Cup with handle |
Source: IBD Data as of Oct. 30
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
