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When InvestingPro’s Fair Value models identified Shift4 Payments (NYSE:FOUR) as significantly undervalued in April 2024, the payment processing company’s stock was trading at $59.04. Today, thirteen months later, investors who acted on this analysis have enjoyed a remarkable 65% return, with the stock now trading at $89.09.
Fair Value analysis helps investors identify stocks trading below their intrinsic value by combining multiple valuation methodologies and fundamental indicators. For investors seeking similar opportunities, the latest undervalued stocks can be found on Investing.com’s Most undervalued list.
Shift4 Payments, which provides end-to-end payment processing solutions, demonstrated strong fundamental potential when InvestingPro’s models flagged it. The company’s exclusive partnership with SpaceX’s Starlink, robust EBITDA margins of 49%, and significant payment volume backlog suggested substantial growth potential. At the time, the company reported annual revenue of $2.7 billion and EBITDA of $363.5 million.
The subsequent performance has validated InvestingPro’s analysis. Since the Fair Value alert, Shift4’s revenue has grown 27% to $3.47 billion, while EBITDA surged 41% to $514.3 million. Earnings per share more than doubled from $1.49 to $3.26. Recent developments, including a Moody’s rating upgrade and better-than-expected quarterly results, have further supported the stock’s upward trajectory.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company valuations, and market range analysis. This comprehensive approach helped identify Shift4’s intrinsic value when the market was underappreciating its potential. The model estimated nearly 50% upside potential, a projection that proved conservative given the actual 65% return.
The company’s recent expansion initiatives, including the potential Global Blue acquisition and international market penetration, suggest continued growth potential. Analyst price targets remain bullish, with several firms maintaining targets above $110, indicating possible further upside.
For investors looking to uncover similar opportunities, InvestingPro offers comprehensive Fair Value analysis, real-time alerts, and detailed fundamental insights. Learn more about InvestingPro to access these powerful investment tools and stay ahead of the market.