Shift4 Payments Falls 21.9% in Third Quarter, Weighing on BBH Mid Cap Fund

Shift4 Payments Inc. recorded a sharp share-price retreat in the third quarter of 2025, becoming the largest single detractor to performance for Brown Brothers Harriman’s (BBH) Select Series – Mid Cap Fund, according to the fund’s latest investor letter released on 10 December 2025.

The fund declined 0.9% on a total-return basis for the three months ended 30 September 2025, trailing the 5.3% advance in the Russell Midcap Index. Year to date, the portfolio was down 1.8%, while the benchmark gained 10.4%. BBH attributed the relative underperformance to a “low-quality rally” that began late last year and strengthened throughout 2025, lifting companies with weaker fundamentals more than those with stronger balance sheets.

Shift4’s Impact on Fund Results

Shift4 Payments, which provides integrated payment-processing software primarily to restaurants, hotels and leisure operators, lost 21.9% of its value during the quarter and finished the period with a 4.4% weighting in the fund. Over the past 52 weeks, the stock fell 34.27%. It closed at USD 66.90 on 9 December 2025, giving the Allentown, Pennsylvania-based company a market capitalization of roughly USD 5.93 billion.

BBH said Shift4’s quarterly results slightly missed consensus estimates for processed volumes, EBITDA and earnings per share. Net revenue and free cash flow came in marginally above expectations, but that positive surprise did not offset investor concern about the headline earnings metrics.

The firm also updated full-year guidance. Excluding the recently completed purchase of tax-free shopping specialist Global Blue, management raised its forecast for net revenue and left the remainder of standalone guidance unchanged. When Global Blue is included, the new volume outlook sits below the average analyst estimate. BBH highlighted that Global Blue is accounted for under International Financial Reporting Standards (IFRS), a factor the fund believes complicated modeling efforts on the sell side and clouded perceptions of Shift4’s underlying performance.

Despite the mixed reception, company management maintained an expectation for more than 20% organic net-revenue growth in 2025 and said results are tracking toward the upper end of the medium-term targets presented in January.

Short-Term Stock Pressure

Shift4’s 8.58% decline in the 30 days preceding the letter’s release added to the stock’s longer slide. Hedge-fund positioning also softened: 45 hedge-fund portfolios held the shares at the end of the third quarter, down from 55 in the previous period, according to public filings compiled by BBH. The payment processor therefore did not appear among the 30 most widely owned stocks in the hedge-fund universe tracked by the investment manager.

BBH named two additional laggards—software services firm Globant S.A. and scientific-instrument maker Bruker Corp.—as notable detractors, but Shift4’s magnitude of decline and portfolio weight made it the dominant factor behind the fund’s negative alpha for the quarter.

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Broader Market Context

The period was marked by strength in lower-quality names across the mid-cap landscape, a continuation of a trend that began in late 2024. Companies with limited earnings visibility or higher leverage generally benefited the most, whereas firms with stable cash flows but more subdued near-term growth prospects lagged the broader index. BBH acknowledged that its quality-centric investment approach struggled against that backdrop.

On the macroeconomic front, U.S. interest rates remained elevated through the quarter, and investors weighed the potential timing of Federal Reserve policy adjustments. While those factors did not directly drive BBH’s stock-specific attributions, they formed part of the risk environment in which payment companies such as Shift4 operate.

Looking Ahead

Shift4’s management continues to focus on cross-selling value-added software around its core processing engine. The acquisition of Global Blue extends the company’s reach into tax-free refund services for international shoppers, diversifying revenue and introducing IFRS accounting considerations. BBH said it is monitoring the integration process, volume trends and any subsequent guidance modifications.

For the BBH Mid Cap Fund, performance in future quarters will depend on whether the low-quality rally persists and on the execution of its larger holdings. The firm reiterated its preference for businesses that generate free cash flow and possess durable competitive advantages, noting that such attributes have historically driven risk-adjusted returns over longer horizons even when shorter-term market cycles favor different characteristics.

Shift4’s share price trajectory in the coming months will likely hinge on the company’s ability to meet or exceed the heightened net-revenue goals and clarify financial reporting around the Global Blue transaction. Analysts remain watchful of processed-volume growth in the core hospitality channel and any incremental margin expansion derived from software-based services.

Crédito da imagem: Brown Brothers Harriman