Bob's Payment Stock Substack

A tremendous slouch. Former payments and fintech analyst. Investor and writer. Dad and aspiring pro golfer. This is not financial advice.

[Bob's Payment Stock Substack @bobspaysubstack]

Full individual stock holdings as of 9/30/26:

[Bob's Payment Stock Substack @bobspaysubstack]

The $GPN show goes on as a standalone w/GTCR and CD&R walking away (pausing) discussions, which never advanced from early stages. $FISV $FOUR down in sympathy. Good news: people are kicking the tires. Bad news: they don't like what they see?

[Bob's Payment Stock Substack @bobspaysubstack]

My earnings recaps for $ADYEN $AXP $BILL $XYZ $BR $CHYM $CPAY $FISV $GPN $JKHY $MA $PAYC $PYPL $FOUR $SHOP $TOST $V https://t.co/MLdnqRmtkg

[Bob's Payment Stock Substack @bobspaysubstack]

My excerpt for $XYZ from my Q3 Payments and FinTech Earnings Recap (releasing tonight):

Synopsis: While XYZ delivered another beat-and-raise quarter, the stock reaction was decidedly more favorable this time around, owing, in my mind, to the introduction of a 2027 outlook that includes ‘at-least’ 15% gross profit growth and a 30% increase in adjusted operating income (AOI) and cooler-than-expected transaction and loan losses in Q3, accompanied by greater disclosure on the unit economics of XYZ’s varied consumer lending products, including targeted risk loss rates. The quarter was far from perfect though, with a non-trivial slowdown in Cash App inflows and primary banking actives (PBAs) growth.

Most Important KPI(s): Square GPV grew 14% on a constant currency basis, up 1-point from Q2, with 10% U.S. growth and a 26% increase internationally. Square gross profit also grew 14%, in-line with GPV, delivering on XYZ’s commitment. Cash App gross profit grew 27%, down 4-points from Q2, reflecting more difficult consumer lending comparisons.

Best Part(s) of Earnings: Given the momentum it is seeing across both new distribution channels (ISOs and field sales), renewed strength in self-onboarded sellers, and accelerated product development, XYZ expects to see a third consecutive year of Square GPV growth acceleration during 2027, suggesting a mid-teens growth rate for both GPV and gross profit, narrowing the spread between XYZ and other highly-valued competitors. While increased transparency around XYZ’s consumer lending products is a welcome development, it must be paired with ongoing disclosure confirming XYZ is achieving its targeted risk loss rates.

Worst Part(s) of Earnings: Key performance indicators continued to slow across Cash App: PBAs of 9.4MM were flat with Q2 while year-over-year growth slowed to 13% from 17% (compared to a 500k sequential increase for CHYM and 20% year-over-year growth, stable with Q2); commerce enablement volume excluding Cash App business grew 16%, down from 19% in Q2; and inflows growth of 10%, down from 13% during Q2.

Under The Radar: Neighborhoods accounted for approximately 500k Cash App monthly active users (MAUs) at the end of September, with approximately half being new to the platform. While AI receives a lot of fanfare, mostly because XYZ is pushing it, I see initiatives such as Neighborhoods and Cash App Score as the highest value ‘optionality’ for XYZ outside the successful enhancements it is making to its core businesses. In my view, selling standalone ‘intelligence tools’ lacks differentiation and pales in comparison to capitalizing on XYZ’s unique network assets and lending data.

Thoughts on the Stock: The combination of improving fundamentals and a discounted valuation makes upside potential still attractive for XYZ from this point, in my opinion. The overhangs I see are: consumer credit concerns (not unique to XYZ); maintaining management discipline and focus (unique to XYZ), and a persistent ‘conglomerate’ discount (also unique to XYZ). While I believe XYZ’s Square is closing the gap with TOST, Cash App is moving in the wrong direction relative to CHYM.

[Bob's Payment Stock Substack @bobspaysubstack]

$GPN: Sold more this morning, down to 1,350 shares. Feels like someone may know something. Not sure how much shares would be down if a deal does not materialize. Fundamentals look fine, stable. Stock still cheap. I'm content to let this run from here, deal or no deal.

[Bob's Payment Stock Substack @bobspaysubstack]

Trump: We must win the AI race against China at all costs. Voters rejecting data centers are ‘backwards’ and will be ‘poor’.

Also Trump: My primary AI ally, arguably one of the most powerful men in the world, is having a romantic relationship with a Chinese spy. Nothing to see here.

Democrats should (and will) have a field day with this issue.

[Bob's Payment Stock Substack @bobspaysubstack]

@nachunja People have been saying this for a LONG time, but one day it will be true!

[Bob's Payment Stock Substack @bobspaysubstack]

@_PGCapital I own both. I bought $V a handful of years ago when I felt it was relatively more attractive than $MA. Bought $MA this summer when I felt the reverse. Both stocks have regained a premium valuation IMO.

[Bob's Payment Stock Substack @bobspaysubstack]

Top 10 Individual Stock Holdings 11/6:
$V
$JNJ
$ABBV
$SYK
$CME
$GOOGL
$GPN
$MO
$INTU
$UPS
Need more tech, hoping for an attractive entry point on the horizon

[Bob's Payment Stock Substack @bobspaysubstack]

Politicians still figuring out how toxic inflation is. As the party not in power, it’s easy to talk about, but fixing it while you’re in office is a whole different matter, and a potentially painful one.

[Matthew C. Klein @M_C_Klein]

We have now had two U.S. elections in a row where incumbents got wrecked because of "the economy" even though, by most objective measures, the economy was doing incredibly well on the eve of *both* elections (and maybe even accelerating slightly).

[Bob's Payment Stock Substack @bobspaysubstack]

@readingthetl 108-125 is my view of fair value and what could be reasonably paid by this specific group. I don’t know if they’d take 108, definitely 125. Anything in between is anyone’s guess.

[Bob's Payment Stock Substack @bobspaysubstack]

$GPN Earnings: Looked fine to me. There's no PR to sell the company, so I guess some people could be disappointed by that. Interestingly, in the presentation, each one of its segments - SMB, Enterprise and Platforms - reported a 1-point improvement in organic revenue growth from Q2 to Q3. Overall, organic revenue growth was >4% vs. just 4% last Q. Very modest I know, but improvement nonetheless. Keeping guidance unchanged and lifting expense synergy target for Worldpay to $650M from $600M.

[Bob's Payment Stock Substack @bobspaysubstack]

AI and Data Centers

Nearly 60% of voters cited AI and data centers as a crucial or major factor in their vote during the mid-term elections. Those voters broke 2-for-1 for Democrats. It was the most lopsided issue for Democrats, even above the war in Iran and government corruption. There were 45ish ballot measures on data centers nationwide on Tuesday, only one passed. Maybe I’m not cynical enough about politicians, but it’s hard to see Democrats slapping some superficial requirements on data centers and AI companies and letting construction and development continue as before. Also, it does not appear Trump is backing off his support for AI AT ALL, making it more likely that Democrats could dig their heels in on this issue. Finally, why should Democratic representatives, senators, and governors care about whether stock prices go up or down, their constituents do not. Trump’s problem is and was that is all he cares about.

[Bob's Payment Stock Substack @bobspaysubstack]

@BarnieTaintpipe I own GPN too so I’ll never truly be free

[Bob's Payment Stock Substack @bobspaysubstack]

FYI: Sold the last 500 shares of $FOUR at $41.23. I’m out. Hope to share fuller thoughts on lessons learned in the coming days, but in the end, the (potential) economic incentives of owning this stock did not align with the mental capacity it required. I was wrong to hold this stock as long as I did, and I may certainly be wrong selling it now, but my involvement is over.

[Bob's Payment Stock Substack @bobspaysubstack]

FYI: Sold 300 shares of $FOUR at $41

[Bob's Payment Stock Substack @bobspaysubstack]

FYI: Sold 300 shares of $FOUR at $41

[Bob's Payment Stock Substack @bobspaysubstack]

NTM P/E
Accenture $ACN 18.2x
Broadcom $AVGO 17.1x
NVIDIA $NVDA 15.1x
Oh my!

[Bob's Payment Stock Substack @bobspaysubstack]

On days like today, I do like to dip my toe, so I'm adding (a little) to $AVGO, $KLAC and $ANET. AI infrastructure was ~3.5% of my total individual stock exposure as of this morning. I would like to bring that up. Also looking at $HUBB closely.

[Bob's Payment Stock Substack @bobspaysubstack]

Thoughts on the payments names coming out of Q3 earnings based on my confidence levels:

$V $MA $SHOP - Pristine but on the expensive side, SHOP especially
$TOST 1a - $XYZ 1b, but on the rise for sure
$FISV - seems like they've reset the base and better days are ahead, more uncertain on core banking
$ADYEN - demand is there, but investments and NT profitability are a big ?
$GPN - Like what they're saying, but the #s need to catch-up, namely got to get organic revenue growth above 5% in 27, ideally 6%
$FOUR - total wildcard at this point, don't know where organic GRLNF growth is going to bottom

[Bob's Payment Stock Substack @bobspaysubstack]

Couple thoughts $FOUR. Seems to be a challenge for them to forecast/communicate their business, which is never a good sign. The framework they laid out for FY27 of MSD-HSD organic revenue growth is disappointing, and could possibly put them at the middle/lower end of $FISV (6-8%), $GPN (5-6%) and $FOUR IMO. Pedal to the medal on share buyback seems diabolical. They bought $200M in Q3. $FOUR is not alone (b/c I've seen it happen w/other companies too) but I'll never understand why when you have a forecast/framework in hand that you know is going to move the stock appreciably lower (which for certain they should've known would be the case), you're in the market buying back so much stock? Then again, if the outlook deteriorated that much in the last part of Q3/first month of Q4, then that's a whole different issue altogether. I'll never make a snap decision to sell, but certainly that's very much on the table right now.

[Bob's Payment Stock Substack @bobspaysubstack]

$FOUR: What else is there to say. Q3 looked in-line, but Q4 guide is bad w/GRLNF just +3.5% at midpoint, and adj EBITDA -3.5% at midpoint ($292M vs. $328M consensus). Saying travel disruptions more pronounced in Q4 and weaker SSS. No one else is saying that. Stock's down mid-teens.