Be careful with that per share earnings. There's a large one off tax credit in there for 2024. That won't happen again. Take that out and the company made a loss last year.
I am not saying that its a bad company or that it won't do well. I am just saying it isn't for me. If you invest, I hope it works out well for you.
You say "EV/EBITDA of Adyen is 28x while Shift4 is 8x"
You need to be careful here.
Adyen grows organically, so all its investment in growth is expensed which impacts the income statement earnings. This will make the Adyen multiples appear inflated (Amazon had the same issue for years as people misinterpreted their multiples).
In contrast, Shift4 grows by acquisition, all of which is capitalized. If you are taking EBITDA, not only are you excluding the CAPEX, but you are also excluding the D&A on that CAPEX. This will flatter the Shift4 numbers and multiples.
So you are comparing apples with oranges. Nothing useful can come out of that comparison.
Hi, you are completely right. Have become more aware of this recently. Same can be applied to Toast, which does S&M while Shift4 does acquisitions mostly.
Hopefully, in one years time I’ve learned such that I find my opinions of today as stupid. But thanks for the input. I’m still just a fool ;)
I’ve started using NOPAT with maintenance capital instead. Puts Adyen and Toast in a better light, and makes more sense imo.
Ole, you inspired me to research Shift4.
Interesting story.
My conclusions were slightly different from yours. If you are interested, you'll find my analysis here: https://rockandturner.substack.com/p/shift-4-payments-inc-remarkable-story
Thanks James! Some points I would add:
- Jared funded half of the share compensation himself
- From my understanding, Taylor will be CEO permanently
- While dilution has been significant, the per share growth has still been top notch
Be careful with that per share earnings. There's a large one off tax credit in there for 2024. That won't happen again. Take that out and the company made a loss last year.
I am not saying that its a bad company or that it won't do well. I am just saying it isn't for me. If you invest, I hope it works out well for you.
You may enjoy reading my analysis of Adyen https://rockandturner.substack.com/p/adyen
Thanks, will check it out for sure
You say "EV/EBITDA of Adyen is 28x while Shift4 is 8x"
You need to be careful here.
Adyen grows organically, so all its investment in growth is expensed which impacts the income statement earnings. This will make the Adyen multiples appear inflated (Amazon had the same issue for years as people misinterpreted their multiples).
In contrast, Shift4 grows by acquisition, all of which is capitalized. If you are taking EBITDA, not only are you excluding the CAPEX, but you are also excluding the D&A on that CAPEX. This will flatter the Shift4 numbers and multiples.
So you are comparing apples with oranges. Nothing useful can come out of that comparison.
Hi, you are completely right. Have become more aware of this recently. Same can be applied to Toast, which does S&M while Shift4 does acquisitions mostly.
Hopefully, in one years time I’ve learned such that I find my opinions of today as stupid. But thanks for the input. I’m still just a fool ;)
I’ve started using NOPAT with maintenance capital instead. Puts Adyen and Toast in a better light, and makes more sense imo.