Shift4 Shares Plunge After Earnings Report, Acquisition

— Jeff Ward, Lehigh Valley News Briefs

Shares of Shift4, a Lehigh County-based payment-processing company, touched a 52-week high on Tuesday afternoon.

Then the company reported earnings and a $2.5 billion acquisition, and the stock (NYSE:FOUR) has fallen about 20%.

The shares were trading at $99.50 at 11:47 a.m. Thursday, down 22% from the high Tuesday of $127.50.

So, what went wrong?

First, the Upper Saucon Township-based company’s earnings and forecast didn’t wow anybody. Not that the numbers were bad, and industry analysts still like the stock.

Second, the company announced the $2.5 billion acquisition of Global Blue, a Swiss firm that helps tourists get Value Added Tax (VAT) refunds on tax-free purchases, and deals with payments.

Third and this isn’t news, founder and Chief Executive Jared Isaacman is leaving to run NASA. Isaacman founded Shift4 26 years ago, when he was 16. He’s a pilot and space traveler on top of being a billionaire.

Isaacman’s departure was not new, and the next leader, President Taylor Lauber, has been with the company for years. His move up was no surprise.

The stock has been moving up a lot recently. The 52-week low is $55.85, less than half of what the price was on Tuesday. So some of the recent decline is a giveback of recent gains.

According to Yahoo Finance, analysts still like the company, which processes payments for hotels, restaurants, sports teams, arenas, casinos, resorts and more. Shift4 is growing in North America and internationally.

Yahoo Finance says the average analyst price target for Shift4 is $131.95, which exceeds the recent peak.

Isaacman has taken a long-term look at growth, focusing on profitable growth, not gains in market share at the expense of net income. Lauber will continue that, and Isaacman will keep his stock in the company.

So this week’s rise and fall might just be a blip. Time will tell.

–Disclosure: I own shares of Shift4 for the long term. My earlier “get-out” price was $108, but I have held on during this recent rise and fall. I like the company, although their earnings presentations can be very awkward. There is a standard format and Shift4 doesn’t follow it.