Shift4 PaymentsNYSE: FOUR

Growth stocks are needle-movers of the broader stock market these days, so it is essential for your portfolio to have exposure to them. Anyone not keeping a pulse on growth stocks is likely underperforming the market by a good margin or losing out entirely.

If you're bullish about the growth potential with the digitalization of finance, there are plenty of promising fintech stocks to buy. Even as macroeconomic uncertainty persists, a forward-looking market is looking beyond today's troubles, and focusing on what lies ahead for the sector.

Shift4 Payments' stock saw a significant increase following a favorable earnings report and talks of mergers and acquisitions, but has since decreased. The company has forecasted over 40% growth in both revenue and profit in the next year. Despite the positive outlook, the stock is currently trading at a low valuation of 10.1 times forward EV/EBITDA.

Shift4's stock has decreased by 21% due to a lack of acceptable takeover offers. Despite this, the company's valuation of less than 5X EV/S is appealing considering its impressive growth rates. Shift4's rapid increase in revenue and profitability, as well as its strong free cash flow conversion, make it a compelling investment opportunity. The company's unique position in the payment processing industry, especially with its innovative SkyTab POS system, sets it up for sustained growth and prosperity.

Fintech companies concentrate on utilizing technology to improve various financial services such as payments, banking, and financial planning. Some of the popular services offered by these firms include cryptocurrencies, "buy now, pay later" options, peer-to-peer payments, business payments, and consumer banking.

Shift4 stock dropped after its CEO said it's received bids that undervalue the company. The stock could potentially double in a takeover based on the value of other comparable companies.

Analysts think this stock should be worth 30% more.

FY23 witnessed significant growth in end-to-end payment volume, subscription revenue, and total revenue, driven by increased merchant adoption in new verticals, strategic acquisitions, and the next-gen SkyTab POS system. Shift4 achieved impressive growth in gross profit and gross margin, outpacing revenue growth, and thus, profitability. Continued margin improvements are anticipated in FY24. Shift4's current premium valuation is justified by its demonstrated self-sustainability, superior growth trajectory, and improving margins.

Shift4 is exploring a sale of the company but it's not getting the offers that it's looking for. For patient investors, allowing the company to grow and compound returns could be far more rewarding.