Shift4: Valuation Disconnect and the Path to a Billion Dollar FCF Run Rate

Christopher Karlin of Associated Bank presented his in-depth investment thesis on Shift4 Payments (US: FOUR) at Best Ideas 2026.

Thesis summary:

Shift4 operates as an integrated payment processor providing commerce technology and software across core verticals including hospitality, restaurants, and sports and entertainment venues. Chris views the company as a non-commoditized business that leverages its software-embedded platform to create high switching costs for merchants. Founded by Jared Isaacman, who recently transitioned to a role as NASA administrator, the company has maintained a unique focus on identifying and controlling transaction choke points. This approach includes a track record of identifying overlooked assets and converting them into high-margin payment volume through a disciplined M&A playbook.

The investment thesis centers on the company’s ability to acquire customers more cost-effectively than peers who rely on heavy sales and marketing spend. By acquiring payment gateways and converting those relationships into full-service merchants, Shift4 often realizes gross profit dollar increases of four to five times. Chris argues that while take rates may appear to be falling, this is actually evidence of a successful migration toward enterprise customers who provide higher total volume dollars. This scale, combined with a fixed-cost operating model, drives operating margin expansion and high returns on incremental invested capital.

Management transition risks appear mitigated by a deep bench of experienced leaders. New CEO Taylor Lauber and CFO Chris Cruz have long histories with the business and were instrumental in developing its capital allocation strategy. The recent acquisition of Global Blue provides an entry point into the retail vertical and international markets while offering a non-commoditized service with 80% market share in VAT reimbursement. Although this acquisition increased leverage, Chris points out that the company has a history of rapid deleveraging and has authorized a $1 billion share repurchase program to capitalize on the current valuation.

Shift4 recently traded at a valuation that Chris considers disconnected from its growth profile and cash generation. The shares recently traded at approximately 7x the run-rate FCF guidance exiting 2027, representing a 14% yield. This compares to peer multiples such as FISV at 8x and TOST at 19x 2027E FCF. While the market has lumped the company in with other broken growth stories and incoherent rollups, Chris expects a re-rating as the company executes on its goal of reaching a $1 billion run rate of adjusted FCF by 2027 while reducing net debt to EBITDA to approximately 1.8x.

The full session is available exclusively to members of MOI Global.

Members, log in below to access the full session.

Not a member?

Thank you for your interest.  Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:

First name:

Last name:

Email address:

City / state / country:

Company:

How did you hear about MOI Global? Select Member referral Staff This website Media / Internet Other

If referral, please provide member's name:

Which of the following applies most closely to you? Select Investment Firm - Head Investment Firm - Analyst or PM Institutional Allocator - Firm C-Level Executive Institutional Allocator - Firm Employee Family Office - Head or Co-Owner Family Office - Employee Non-Investment Firm - C-Level Executive Non-Investment Firm - Employee Other

How do you hope to add value to the community?

Leave this field empty if you're human:

About the instructor:

Christopher Karlin has been in the investment business since 1991. Prior to founding Aquitania Capital Management in 2012, Christopher held positions as a Research Analyst and Portfolio Manager at First Pacific Advisors, Kestrel Investment Management and Fairview Capital Investment Management. Christopher interned with Farallon Capital Management while pursuing his MBA. He began his career with Wells Fargo Nikko Investment Advisors which later became a part of Blackrock. Christopher received his BBA from the University of Wisconsin in 1990 his MBA from Yale University in 1998 and has held the CFA designation since 1994.