Bob's Payment Stock Substack

$INTU trades at <15x FY27 (July) EPS fully burdened for SBC. I will take that for a business expected to grow revenue at high-end of low DD and EPS >15%. $INTU is making big bets on assisted tax, its money portfolio, and mid-market, all growing >30%. It is not making a big bet on the low-end DIY filer, which is a very small portion of its business. Hence why it was able to raise the overall full-year guide despite weakness there.

Thoughts on the $INTU quarter and why I’ll be buying more (at a measured pace)

@nachunja @CashApp I think they’re going to be more aggressive on price (or perhaps even be free) for low-end filers as a way to keep those customers in the ecosystem and engaged (i.e. a Credit Karma Money account).

$XYZ $INTU Why use TurboTax for a fee when you can file taxes on @CashApp for free.

The problem for $INTU is that no one is going to rush out to buy the stock b/c you have to wait a full year to determine whether this tax season was a 'blip' or something more. End of day, TurboTax DIY is ~12% of total revenue. All other $INTU revenue will grow 18% in FY26.

$INTU: They raise guidance in aggregate and everywhere EXCEPT for TurboTax (where they trim: +7% now vs. +8% prior). Enough for an 11% drop. Don't think it's justified, but not surprised. Definitely a 'show me' story...it'll be a long wait until next tax season.

@KVanValkenburg @KylePorterNS Great interview!

Good morning, Damon. I talked with Gary Player this past week at Aronimink about being 90, about Ozempic, about Winston Churchill, about socialism, about the future of LIV and what it was like to fly with Arnie. “I’d be on the floor about to crap myself!” thefriedegg.com/articles/gary-…

@TheValueVision My broker sends me the annual reports and proxies for all of the stocks I own

@bobspaysubstack Where do you get these from?

New reading material just arrived $XYZ $FOUR

@Geiger_Capital Agreed. Running against inflation is easy, but breaking its back while in office is another challenge all together.

For the last ~40 years while rates fell and inflation was rarely thought about by the public, being the incumbent was a strong advantage in American politics… However, in an inflationary environment with long-term rates rising, they will be punished.

Hard to believe it’s the last day of school!

@TomSmith839 @Square No news, just a recap of recent developments

@bobspaysubstack @Square What’s the news?

$TOST. Legitimate or not, I think there's a perception that competition is heating up in restaurant POS and that could potentially impact/slow $TOST's leadership position: (1) @Square's renewed focus on the vertical has proven successful with GPV growth from food & beverage reaching 21% in Q1, nearly matching $TOST's 22% increase; (2) $DASH is reportedly set to launch its own POS system soon, a concern enough for one analyst to downgrade $TOST last week on the premise that $DASH's POS system will capture a meaningful portion (I saw 20%) of U.S. restaurant locations by 2035; (3) last week $FISV announced Clover Reserve powered by software firm Tabit, which will target full-service and fine dining restaurants, expanding from Clover's historical focus on limited-service restaurants.

Generally, I think it’s a waste of time to think *too* deeply about whether $FISV $GPN or $FOUR is the better buy. Yes, there are differences among the three, but the market is painting with a broad brush and they are clearly non-believers when it comes to “this group” (i.e., legacy payments companies with too much debt buying back a bunch of stock…wow, company x is going to buy back X% over the next 3 years, surely that will make the stock go up). I think the tide turns at some point and when it does all of these stocks will move appreciably higher in unison. That, or I go broke waiting, one of those two.

Size has always been seen as a competitive advantage in payments. Many companies are making same claim about data: the more, the better. Unfortunately, most companies are not in a position to utilize it effectively because it’s scattered all over. $FISV laid out a vision for spinning up an enterprise ecom/omni-channel platform similar to $ADYEN by the beginning of next year that capitalizes on their data and banking relationships. Of course, that’s easier said than done, but they think AI will be able to help them do it.

I kind of hate that being the "moat" since it really is tough to say. I tend towards some disruption, but they'll use AI to fight disruption to a stand still. Minimal growth, smaller piece of the pie, but the pie is still growing. Probably more of an opportunity cost than anything.

$FISV: AI will help us close the technology gap w/modern platforms quickly. Q: Will these same tools lower barriers to competition? $FISV: No, b/c we’re system of record/infrastructure w/vast amounts of data. Is $FISV right or wrong? That’s the million dollar question.

Not too many surprises from $FISV on medium-term outlook: revenue CAGR 4-6% (organic?), margins expanding from ~34% in ‘26 to >37% in ‘29, and DD EPS growth. Details most important. Interested to hear their presentation.

My calculated fair value for $shop last fall was $117. Key assumption underlying that was global e-com growing @ 8% CAGR over 15 years and $shop’s share rising from 9-10% today to ~30% by 2040. Ambitious. There may be *some* margin of safety today, but is it enough?