PayPal CEO Change Amid Disappointing Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy PYPL?
Source: Fool
- CEO Departure: PayPal has parted ways with CEO Alex Chriss, who has been in the role since late 2023, as his efforts to revitalize the company post-COVID have not yielded the expected results, prompting the board to seek new leadership for growth.
- Disappointing Earnings: In the fourth quarter, PayPal's revenue grew by only 4% and adjusted EPS by 3%, with disappointing guidance for 2026 due to lower interest rates and increased investment needs, indicating that growth initiatives have not yet translated into improved financial performance.
- Strategic Partnerships and Innovations: PayPal announced it will be the first integrated payments wallet in OpenAI's ChatGPT and has partnered with Google to develop new payment solutions, showcasing its proactive approach to technology and market integration aimed at enhancing future competitiveness.
- Stock Buyback Plan: PayPal plans to execute $6 billion in stock buybacks in 2026, potentially repurchasing about 15% of its outstanding shares, a move that could create long-term value for shareholders while reflecting the company's confidence in its future amidst current undervaluation.
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Analyst Views on PYPL
Wall Street analysts forecast PYPL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PYPL is 72.86 USD with a low forecast of 51.00 USD and a high forecast of 100.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
29 Analyst Rating
6 Buy
19 Hold
4 Sell
Hold
Current: 41.700
Low
51.00
Averages
72.86
High
100.00
Current: 41.700
Low
51.00
Averages
72.86
High
100.00
About PYPL
PayPal Holdings, Inc. offers a technology platform. The Company’s products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, and secure, online or offline, including mobile. It provides consumers with a digital wallet that enables them to send payments to merchants securely using a variety of funding sources, which include a bank account, a PayPal or Venmo account balance, its consumer credit products, a credit card, a debit card, certain cryptocurrencies, or other stored value products. It operates a global, two-sided network at scale that connects consumers and merchants with 434 million active accounts across approximately 200 markets. Its brands include PayPal, Braintree, Venmo, Xoom, Hyperwallet, PayPal Zettle, PayPal Honey, and Paidy. It offers financing products through the PayPal Working Capital (PPWC) and PayPal Business Loan (PPBL).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
PayPal Reports Weak Q4 Results, Faces Cost Disadvantage
- Missed Expectations: PayPal's Q4 revenue of $8.68 billion fell short of the $8.79 billion expected by analysts, indicating a lack of competitive strength in the digital payments sector that could impact future market share.
- Significant Stock Decline: Following the disappointing results, PayPal's stock plummeted over 20% on Tuesday, reflecting investor concerns about the company's outlook, which may lead to increased financing costs and diminished investor confidence.
- Cost Disadvantage: PayPal's transaction fee of 3.5% is significantly higher than competitors like Venmo at 1.9% and Square at 2.9%, placing PayPal at a disadvantage in attracting sellers, potentially affecting its market competitiveness.
- New CEO Appointment: PayPal announced the appointment of Enrique Lores as the new CEO effective March 1, 2026, replacing current CEO Alex Chriss; while new leadership may bring change, performance pressures are expected to persist in the short term.
See More
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- Growth Prospects: Despite a lackluster stock performance in recent years, Adyen is actively expanding into the U.S. market and plans to penetrate the large-format retail sector, initiatives expected to unlock significant revenue growth and margin improvement.
- Competitive Advantage: By providing risk management and fraud protection services without relying on intermediaries, Adyen has established a strong economic moat, ensuring high switching costs for clients and enhancing customer loyalty.
- Investment Appeal: With the current stock price around $15 and a robust gross margin of 83.34%, Adyen is viewed as a compelling long-term investment opportunity, particularly for patient investors looking for growth.
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PayPal Stock Continues Decline Amid CEO Change and Criticism
- Stock Decline Continues: PayPal's stock fell over 2% on Wednesday, adding to a 20% drop on Tuesday due to disappointing earnings and a CEO change, marking the ninth consecutive day of decline since January 22, with an overall drop of nearly 29%.
- Former Executive Critiques Strategy: Former PayPal President David Marcus criticized the company's strategic choices in a social media post, highlighting a pattern of prioritizing predictability over platform risk, which he believes has led to a loss of competitive edge since his departure.
- Leadership Change Raises Concerns: New CEO Enrique Lores, with a hardware background rather than payments, faces skepticism from Marcus regarding his ability to navigate transaction economics and network effects, potentially impacting the company's strategic execution and innovation.
- Market Share Erosion: PayPal has seen a decline in checkout share among its most profitable customers, with recurring issues in lending and buy now/pay later services, indicating significant challenges in a highly competitive payments landscape.
See More
Pelosi Sells PayPal Shares to Avoid Losses
- Trading Activity: Paul Pelosi sold 5,000 shares of PayPal on December 30, 2025, valued between $250,000 and $500,000, demonstrating a keen sense of market timing.
- Loss Avoidance: By selling at a peak value of $298,000, Pelosi dodged a potential loss of $96,450, which represents 55.4% of her annual salary, highlighting the effectiveness of her trading decisions.
- Market Decline: Following the sale, PayPal's stock plummeted by 20.3%, trading at $40.31 at the time of writing, indicating poor performance after the new CEO's appointment, raising investor concerns.
- Future Outlook: Pelosi has announced she will not seek re-election in 2026 and plans to leave Congress in 2027, suggesting a reduction in her household's stock trading activities, prompting investors to monitor other potential market developments.
See More
PayPal Under Investigation for Possible Securities Violations
- Leadership Change: On February 3, 2026, PayPal unexpectedly replaced CEO Alex Chriss, with the Board stating that “the pace of change and execution was not in line with expectations,” raising significant concerns about corporate governance.
- Earnings Miss: On the same day, PayPal reported its Q4 and full-year 2025 earnings, with adjusted EPS of $1.23, missing the $1.29 consensus estimate, and revenue of $8.68 billion, below the expected $8.79 billion, indicating weaknesses in its branded checkout execution.
- Stock Price Plunge: Following this news, PayPal's stock price fell by 20% during intraday trading on February 3, 2026, resulting in substantial losses for investors and reflecting market apprehension regarding the company's future performance.
- Legal Investigation Initiated: Glancy Prongay Wolke & Rotter LLP has announced an investigation into PayPal to assess potential violations of federal securities laws, allowing investors to explore options for recovering losses, thus highlighting the increasing legal risks faced by the company.
See More
PayPal's Decline: A Shift from Product to Finance
- Branded Checkout's Growth Stall: Former PayPal leader David Marcus highlights that the company's focus on optimizing total payment volume led to a mere 1% growth in branded checkout, putting it at a competitive disadvantage and causing a loss of market leadership.
- Cultural Shift Impacts Product Strategy: After the eBay spinoff, PayPal's leadership transitioned from product builders to financial engineers, which Marcus argues resulted in the company treating BNPL merely as a feature rather than a consumer relationship, thereby weakening user loyalty.
- Acquisitions Lacked Strategic Leverage: While acquisitions like Honey and Xoom increased activity, they failed to provide strategic leverage at the critical checkout moment, undermining PayPal's core competitiveness and preventing effective integration of these resources to enhance user experience.
- Incentives Need Reevaluation: With a new CEO in place, Marcus emphasizes that the key issue facing PayPal lies in the design of its incentive mechanisms; unless the board makes adjustments, PayPal risks becoming a great business that never realizes its network potential.
See More
PayPal Reports Weak Q4 Results, Faces Cost Disadvantage
- Missed Expectations: PayPal's Q4 revenue of $8.68 billion fell short of the $8.79 billion expected by analysts, indicating a lack of competitive strength in the digital payments sector that could impact future market share.
- Significant Stock Decline: Following the disappointing results, PayPal's stock plummeted over 20% on Tuesday, reflecting investor concerns about the company's outlook, which may lead to increased financing costs and diminished investor confidence.
- Cost Disadvantage: PayPal's transaction fee of 3.5% is significantly higher than competitors like Venmo at 1.9% and Square at 2.9%, placing PayPal at a disadvantage in attracting sellers, potentially affecting its market competitiveness.
- New CEO Appointment: PayPal announced the appointment of Enrique Lores as the new CEO effective March 1, 2026, replacing current CEO Alex Chriss; while new leadership may bring change, performance pressures are expected to persist in the short term.
See More
Adyen: A Top Stock for Long-Term Investment
- Business Robustness: Adyen is a leading fintech company that offers integrated payment services, enabling clients to process over $1 trillion in payment volume globally, demonstrating its strong market position and consistent revenue generation.
- Growth Prospects: Despite a lackluster stock performance in recent years, Adyen is actively expanding into the U.S. market and plans to penetrate the large-format retail sector, initiatives expected to unlock significant revenue growth and margin improvement.
- Competitive Advantage: By providing risk management and fraud protection services without relying on intermediaries, Adyen has established a strong economic moat, ensuring high switching costs for clients and enhancing customer loyalty.
- Investment Appeal: With the current stock price around $15 and a robust gross margin of 83.34%, Adyen is viewed as a compelling long-term investment opportunity, particularly for patient investors looking for growth.
See More
PayPal Stock Continues Decline Amid CEO Change and Criticism
- Stock Decline Continues: PayPal's stock fell over 2% on Wednesday, adding to a 20% drop on Tuesday due to disappointing earnings and a CEO change, marking the ninth consecutive day of decline since January 22, with an overall drop of nearly 29%.
- Former Executive Critiques Strategy: Former PayPal President David Marcus criticized the company's strategic choices in a social media post, highlighting a pattern of prioritizing predictability over platform risk, which he believes has led to a loss of competitive edge since his departure.
- Leadership Change Raises Concerns: New CEO Enrique Lores, with a hardware background rather than payments, faces skepticism from Marcus regarding his ability to navigate transaction economics and network effects, potentially impacting the company's strategic execution and innovation.
- Market Share Erosion: PayPal has seen a decline in checkout share among its most profitable customers, with recurring issues in lending and buy now/pay later services, indicating significant challenges in a highly competitive payments landscape.
See More
Pelosi Sells PayPal Shares to Avoid Losses
- Trading Activity: Paul Pelosi sold 5,000 shares of PayPal on December 30, 2025, valued between $250,000 and $500,000, demonstrating a keen sense of market timing.
- Loss Avoidance: By selling at a peak value of $298,000, Pelosi dodged a potential loss of $96,450, which represents 55.4% of her annual salary, highlighting the effectiveness of her trading decisions.
- Market Decline: Following the sale, PayPal's stock plummeted by 20.3%, trading at $40.31 at the time of writing, indicating poor performance after the new CEO's appointment, raising investor concerns.
- Future Outlook: Pelosi has announced she will not seek re-election in 2026 and plans to leave Congress in 2027, suggesting a reduction in her household's stock trading activities, prompting investors to monitor other potential market developments.
See More
PayPal Under Investigation for Possible Securities Violations
- Leadership Change: On February 3, 2026, PayPal unexpectedly replaced CEO Alex Chriss, with the Board stating that “the pace of change and execution was not in line with expectations,” raising significant concerns about corporate governance.
- Earnings Miss: On the same day, PayPal reported its Q4 and full-year 2025 earnings, with adjusted EPS of $1.23, missing the $1.29 consensus estimate, and revenue of $8.68 billion, below the expected $8.79 billion, indicating weaknesses in its branded checkout execution.
- Stock Price Plunge: Following this news, PayPal's stock price fell by 20% during intraday trading on February 3, 2026, resulting in substantial losses for investors and reflecting market apprehension regarding the company's future performance.
- Legal Investigation Initiated: Glancy Prongay Wolke & Rotter LLP has announced an investigation into PayPal to assess potential violations of federal securities laws, allowing investors to explore options for recovering losses, thus highlighting the increasing legal risks faced by the company.
See More
PayPal's Decline: A Shift from Product to Finance
- Branded Checkout's Growth Stall: Former PayPal leader David Marcus highlights that the company's focus on optimizing total payment volume led to a mere 1% growth in branded checkout, putting it at a competitive disadvantage and causing a loss of market leadership.
- Cultural Shift Impacts Product Strategy: After the eBay spinoff, PayPal's leadership transitioned from product builders to financial engineers, which Marcus argues resulted in the company treating BNPL merely as a feature rather than a consumer relationship, thereby weakening user loyalty.
- Acquisitions Lacked Strategic Leverage: While acquisitions like Honey and Xoom increased activity, they failed to provide strategic leverage at the critical checkout moment, undermining PayPal's core competitiveness and preventing effective integration of these resources to enhance user experience.
- Incentives Need Reevaluation: With a new CEO in place, Marcus emphasizes that the key issue facing PayPal lies in the design of its incentive mechanisms; unless the board makes adjustments, PayPal risks becoming a great business that never realizes its network potential.
See More
