PayPal Crisis Deepens as Leadership Shake?up and Weak Guidance Roil Investors

• Slump in shares: the equity is trading near a 12‑month low after a roughly 23% drop since the earnings release on February 2.
• Management shake‑up: Chief Executive Alex Chriss is out, with HP’s Enrique Lores stepping in to take the helm.
• Outlook: the 2026 earnings forecast is well below what the market had priced in.

Wall Street’s confidence wanes

PayPal’s slide extended on Thursday, pushing the stock to a new 12‑month low. Since the Feb. 2 quarterly results, the company has shed around 23% of its market value. The shares hovered around $40, reflecting mounting skepticism among investors.

Industry analysts wasted no time adjusting targets. Rothschild & Co slashed its price target from $50 to $32 and kept a Sell rating. Wells Fargo also trimmed its fair value assessment, bringing it down to $48. Trading volume remained elevated as major holders re-evaluated their positions.

Operative weakness laid bare

The pullback is rooted in soft top‑line and margin metrics. PayPal reported fourth‑quarter revenue of $8.68 billion and adjusted earnings per share of $1.23, missing consensus expectations.

Of particular concern is the core business. Growth in the branded checkout segment—the traditional PayPal checkout experience—slowed to a meager 1% year over year. Chief Financial Officer Jamie Miller acknowledged that customers in the middle- and lower-income brackets are feeling the squeeze. The decline is notable because the legacy checkout business has been more profitable than the back‑end payment processing operations.

Should investors sell immediately? Or is it worth buying PayPal?

Leadership upheaval and strategic critique

Amid the operating headwinds, a sudden leadership change added to the unease. After roughly two and a half years at the helm, Chief Executive Alex Chriss was ousted, with the board citing the pace of execution as not meeting expectations. From March 1, Enrique Lores, the current CEO of HP, will assume control.

Criticism of PayPal’s strategy grew louder. David Marcus, a former PayPal president, commented publicly that the company had ceded its “product advantage” and allowed market share to erode to rivals, arguing that financial optimization had been prioritized over product conviction.

Bleak near‑term prospects

Near-term outlooks offer little relief. Instead of the roughly 8% growth anticipated by analysts, management has guided for 2026 to be flat or mildly down in earnings. The long‑term targets for 2027 were completely removed from the plan. In addition, several U.S. law firms have launched probes into potential securities-law violations connected to the latest disclosures.

Investors now await March 1, the date Enrique Lores officially takes the reins. He faces the task of presenting a credible plan for how PayPal will compete with giants like Apple and Google and how margins can be stabilized.

What to watch next

• March 1 milestone: Lores’ formal leadership debut and the fresh strategic plan.
• Margin stabilization: market will scrutinize whether the new leadership can arrest the profit decline and restore confidence.
• Regulatory scrutiny: ongoing investigations may influence sentiment and potential legal risk premiums.
• Competitive momentum: how PayPal can regain pricing power in a market dominated by tech/commerce platforms.