Greystone Capital Management LLC on Shift4 Technologies
Thesis
Shift4 shares fell after strong 2025 results were accompanied by weaker-than-expected 2026 guidance, tax-free-shopping headwinds and lower free-cash-flow conversion. Greystone nevertheless expects the company to outgrow the payments market through integrated payments, differentiated vertical software and cross-selling into acquired customer bases. Incremental free-cash-flow conversion remains around 60%, which Greystone believes can drive 100 to 200 basis points of annual improvement in total conversion as EBITDA grows. The stock traded at a mid-single-digit EBITDA multiple and below 10 times Greystone's 2026 earnings estimate, while management was repurchasing shares and the founder had recently bought stock. Greystone's base-case intrinsic-value estimate is $120 to $160 per share versus approximately $48 at the time of the letter.
“My base case estimate of intrinsic value sits between $120 - $160/share, using very conservative assumptions, and a multiple way below peer companies.”
Key risks
- Slower-than-expected growth
- Near-term tax-free-shopping headwinds
- Lower-than-expected free-cash-flow conversion
- Poor execution or value destruction from the Global Blue transaction