Couldn’t Resist Anymore – Time to Stack Up on Fintech
Yesterday I finally pulled the trigger on two new positions I discussed just a few weeks ago: Shift4 and Fiserv. Well, technically, I added to Fiserv, which I already hold, and opened a fresh stake in Shift4. The timing felt right after news broke that Toast is slashing its prices to attract smaller restaurants and better compete with Shift4 and other competitors. But here’s the irony: even after Toast’s price cut, Shift4’s package is still meaningfully cheaper – and frankly, better value. If anything, this move validates Isaacman’s strategy. Yet the stock sold off on the headline before quickly rebounding almost back to prior levels. To me, that just underlined how knee-jerk and unjustified the selloff was. I liked the company before and weighed pros against cons for days, until I finally went through with it.
Now, why these two? Shift4 is the long-term play. Jason Isaacman has built a company with a clear vision, excellent execution, and the discipline to buy more shares himself whenever the stock dips – that’s real commitment. Founder-led companies are my favorites. That doesn’t mean it’s absolutely necessary, but especially for newer disruptors it provides a clear way forward and the innovator at the helm. Multiple positions in my portfolio are still steered by their founders – whether it’s Dlocal, Nu, or now Shift4.
On valuation: it trades at a forward EV/revenue of just 1.9, which is much more telling than P/E for a high-growth company. Still, even on that metric, earnings are catching up quickly, with a projected forward P/E of only 16–17 by 2027. For a disruptor in this space, that’s compelling.
Fiserv, by contrast, is not one I plan to hold forever. But it’s a cash-generating monster with a strong moat. At a forward EV/revenue of 4–5 and a forward P/E of about 17, it’s dirt cheap for what it delivers: steady high single-digit revenue growth and double-digit EPS expansion – including more than 35% expected in FY25. That kind of growth at this valuation doesn’t come often in fintech. For me, Fiserv is the undervalued giant I’ll ride for a solid rebound before eventually trimming at the right levels. Shift4 is intended to eventually replace Fiserv, but at the moment I can’t think of much better holdings to store my money, besides maybe UnitedHealth or Novo Nordisk.
Both companies sit in the same space, both carry some leverage from much-needed acquisitions, and both are competing in one of the most attractive sectors in fintech. But while Fiserv is my undervalued giant for medium-term upside, Shift4 is the future.
