Critical Comparison: Farfetch (NYSE:FTCH) vs. Shift4 Payments (NYSE:FOUR)

Shift4 Payments (NYSE:FOURGet Rating) and Farfetch (NYSE:FTCHGet Rating) are both mid-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Shift4 Payments and Farfetch, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shift4 Payments 1 3 10 0 2.64
Farfetch 1 5 10 0 2.56

Shift4 Payments presently has a consensus target price of $62.13, indicating a potential upside of 37.77%. Farfetch has a consensus target price of $15.75, indicating a potential upside of 100.89%. Given Farfetch’s higher probable upside, analysts plainly believe Farfetch is more favorable than Shift4 Payments.

Earnings & Valuation

This table compares Shift4 Payments and Farfetch’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shift4 Payments $1.37 billion 2.78 -$48.20 million $0.44 102.50
Farfetch $2.26 billion 1.32 $1.47 billion ($1.81) -4.33

Farfetch has higher revenue and earnings than Shift4 Payments. Farfetch is trading at a lower price-to-earnings ratio than Shift4 Payments, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Shift4 Payments has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, Farfetch has a beta of 2.8, indicating that its stock price is 180% more volatile than the S&P 500.

Institutional and Insider Ownership

68.3% of Shift4 Payments shares are held by institutional investors. Comparatively, 85.1% of Farfetch shares are held by institutional investors. 36.6% of Shift4 Payments shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Shift4 Payments and Farfetch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shift4 Payments 1.97% 8.53% 1.34%
Farfetch 26.67% 58.40% 13.13%

Summary

Farfetch beats Shift4 Payments on 8 of the 13 factors compared between the two stocks.

About Shift4 Payments

(Get Rating)

Shift4 Payments, Inc. (NYSE FOUR) provides integrated payment processing and technology solutions in the United States. Its payments platform provides omni-channel card acceptance and processing solutions, including end-to-end payment processing for various payment types; merchant acquiring; proprietary omni-channel gateway; complementary software integrations; integrated and mobile point-of-sale (POS) solutions; security and risk management solutions; and reporting and analytical tools, as well as tokenization, risk management/underwriting, payment device and chargeback management, fraud prevention, and gift card solutions. The company also offers suite of technology solutions, such as Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics; integrated POS for merchants business; and Skytab, a mobile payment solution. In addition, it provides marketplace technology that enable seamless integrations into third-party applications, which includes online delivery services, payroll, timekeeping, and other human resource services. Further, the company offers merchant management, training and education, marketing management, and incentives tracking solutions. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services; and software integrations and compliance management, and partner support and services. The company was founded in 1998 and is headquartered in Allentown, Pennsylvania.

About Farfetch

(Get Rating)

Farfetch Ltd. engages in the retail of fashion and luxury goods. It offers womenswear, menswear, kidswear, vintage, fine watches, and fine jewelry. The company was founded by José Manuel Ferreira Neves in 2007 and launched in 2008 and is headquartered in London, the United Kingdom.

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