Let’s dig into the relative performance of Shift4 (NYSE: FOUR) and its peers as we unravel the now-completed Q1 payment processing earnings season.

Payment processors facilitate transactions between merchants, consumers, and financial institutions. Growth comes from e-commerce expansion, declining cash usage globally, and value-added services beyond basic processing. Headwinds include margin pressure from merchant negotiating power, rapid technological change requiring investment, and emerging competition from technology companies entering the payments ecosystem.

The 4 payment processing stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.6%.

While some payment processing stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.9% since the latest earnings results.

Best Q1: Shift4 (NYSE: FOUR)

Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE: FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.

Shift4 reported revenues of $848.3 million, up 19.9% year on year. This print fell short of analysts’ expectations by 1.7%, but it was still a strong quarter for the company with a beat of analysts’ EPS and transaction volumes estimates.

Shift4 scored the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 9.2% since reporting and currently trades at $86.88.

Read why we think that Shift4 is one of the best payment processing stocks, our full report is free.

EVERTEC (NYSE: EVTC)

Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.

EVERTEC reported revenues of $229.6 million, up 8.3% year on year, outperforming analysts’ expectations by 3.3%. The business had a strong quarter with a decent beat of analysts’ EBITDA and EPS estimates.

EVERTEC scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $33.44.

Is now the time to buy EVERTEC? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Fiserv (NYSE: FI)

Powering over 1 billion accounts and processing more than 12,000 financial transactions per second globally, Fiserv (NYSE: FI) provides payment processing and financial technology solutions that enable merchants, banks, and credit unions to accept payments and manage financial transactions.

Fiserv reported revenues of $5.20 billion, up 1.7% year on year, falling short of analysts’ expectations by 5.8%. It was a softer quarter as it posted a significant miss of analysts’ organic revenue estimates.

Fiserv delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 18.9% since the results and currently trades at $134.56.

Read our full analysis of Fiserv’s results here.

Jack Henry (NASDAQ: JKHY)

Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ: JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.

Jack Henry reported revenues of $615.4 million, up 9.9% year on year. This print topped analysts’ expectations by 1.8%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ Processing segment estimates but a slight miss of analysts’ EBITDA estimates.

The stock is flat since reporting and currently trades at $160.50.

Read our full, actionable report on Jack Henry here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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