We assign a fundamental rating of 5 out of 10 to FOUR. FOUR was compared to 97 industry peers in the Financial Services industry. There are concerns on the financial health of FOUR while its profitability can be described as average. FOUR is not priced too expensively while it is growing strongly. Keep and eye on this one!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year FOUR was profitable.
In the past year FOUR had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: FOUR reported negative net income in multiple years.
Each year in the past 5 years FOUR had a positive operating cash flow.

1.2 Ratios

FOUR has a Return On Assets of 1.87%. This is comparable to the rest of the industry: FOUR outperforms 56.70% of its industry peers.
FOUR has a Return On Equity of 10.06%. This is comparable to the rest of the industry: FOUR outperforms 57.73% of its industry peers.
With a decent Return On Invested Capital value of 4.95%, FOUR is doing good in the industry, outperforming 67.01% of the companies in the same industry.
FOUR had an Average Return On Invested Capital over the past 3 years of 5.43%. This is below the industry average of 8.46%.

		Industry Rank	Sector Rank
ROA	1.87%
ROE	10.06%
ROIC	4.95%

ROA(3y)3.33%

ROA(5y)1.36%

ROE(3y)21%

ROE(5y)8.17%

ROIC(3y)5.43%

ROIC(5y)N/A

1.3 Margins

FOUR has a worse Profit Margin (4.33%) than 63.92% of its industry peers.
FOUR's Operating Margin of 11.37% is in line compared to the rest of the industry. FOUR outperforms 44.33% of its industry peers.
In the last couple of years the Operating Margin of FOUR has grown nicely.
Looking at the Gross Margin, with a value of 32.61%, FOUR is in line with its industry, outperforming 49.48% of the companies in the same industry.
FOUR's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	11.37%
PM (TTM)	4.33%
GM	32.61%

OM growth 3Y125.47%

OM growth 5Y42.69%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y12.8%

GM growth 5Y3.61%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FOUR is destroying value.
FOUR has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, FOUR has more shares outstanding
FOUR has a worse debt/assets ratio than last year.

2.2 Solvency

FOUR has an Altman-Z score of 1.13. This is a bad value and indicates that FOUR is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.13, FOUR is doing good in the industry, outperforming 61.86% of the companies in the same industry.
The Debt to FCF ratio of FOUR is 13.67, which is on the high side as it means it would take FOUR, 13.67 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of FOUR (13.67) is comparable to the rest of the industry.
FOUR has a Debt/Equity ratio of 2.41. This is a high value indicating a heavy dependency on external financing.
FOUR has a worse Debt to Equity ratio (2.41) than 73.20% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	2.41
Debt/FCF	13.67
Altman-Z	1.13

ROIC/WACC0.7

WACC7.1%

2.3 Liquidity

FOUR has a Current Ratio of 1.38. This is a normal value and indicates that FOUR is financially healthy and should not expect problems in meeting its short term obligations.
FOUR's Current ratio of 1.38 is fine compared to the rest of the industry. FOUR outperforms 64.95% of its industry peers.
A Quick Ratio of 1.38 indicates that FOUR should not have too much problems paying its short term obligations.
The Quick ratio of FOUR (1.38) is better than 65.98% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.38
Quick Ratio	1.38

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 51.21% over the past year.
FOUR shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 108.37% yearly.
FOUR shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.16%.
Measured over the past years, FOUR shows a very strong growth in Revenue. The Revenue has been growing by 35.42% on average per year.

EPS 1Y (TTM)51.21%

EPS 3Y108.37%

EPS 5YN/A

EPS Q2Q%41.35%

Revenue 1Y (TTM)23.16%

Revenue growth 3Y34.54%

Revenue growth 5Y35.42%

Sales Q2Q%29.44%

3.2 Future

FOUR is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.91% yearly.
FOUR is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.45% yearly.

EPS Next Y37.19%

EPS Next 2Y30.78%

EPS Next 3Y27.19%

EPS Next 5Y20.91%

Revenue Next Year21.19%

Revenue Next 2Y22.84%

Revenue Next 3Y19.96%

Revenue Next 5Y16.45%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

FOUR is valuated correctly with a Price/Earnings ratio of 13.27.
FOUR's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.21. FOUR is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.95, the valuation of FOUR can be described as very reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as FOUR.
FOUR is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	13.27
Fwd PE	9.95

4.2 Price Multiples

FOUR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. FOUR is cheaper than 64.95% of the companies in the same industry.
FOUR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FOUR is cheaper than 61.86% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	17
EV/EBITDA	11.03

4.3 Compensation for Growth

FOUR's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as FOUR's earnings are expected to grow with 27.19% in the coming years.