PayPal's Disappointing Q4 Results Lead to Stock Plunge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 19h ago
0mins
Should l Buy PYPL?
Source: stocktwits
- Stock Plunge: PayPal's shares fell 20% following disappointing Q4 results announced on February 3, with a cumulative drop of over 30% in the subsequent 10 trading days, reflecting strong market concerns about its financial performance.
- Investor Sentiment: Despite the ongoing decline in stock price, retail investor sentiment on Stocktwits remains in the 'extremely bullish' territory, indicating optimism about PayPal's long-term potential, particularly due to its low P/E ratio of 7.59 and strong free cash flow.
- Earnings Snapshot: PayPal reported Q4 revenue of $8.68 billion, a 4% year-over-year increase but below the $8.79 billion estimate, with adjusted earnings of $1.23 per share also missing expectations of $1.29, highlighting execution challenges within the company.
- Analyst Rating Adjustments: Wells Fargo cut PayPal's price target from $67 to $48, while UBS lowered its target from $65 to $44, both citing company-specific execution issues that could impact future profitability.
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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: 39.900
Low
51.00
Averages
72.86
High
100.00
Current: 39.900
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.
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- Leadership Change: The company announced that HP CEO Enrique Lores will take over as CEO on March 1, replacing Alex Chriss, which may impact the strategic direction of PayPal amid increasing competition in the payments industry.
- Poor Stock Performance: Over the past year, PayPal's stock has plummeted approximately 50%, while the S&P 500 has risen 14%, highlighting its significant underperformance and severely undermining investor confidence in its future outlook.
- Analyst Downgrades: Following the earnings report, multiple Wall Street firms lowered their price targets for PayPal, with Bank of America cutting its target from $68 to $48, reflecting skepticism about its management and business model, suggesting that the stock may remain under pressure in the near term.
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- Earnings Miss: PayPal's Q4 revenue of $8.68 billion, a 4% year-over-year increase, fell short of the $8.79 billion expectation, triggering a record one-day drop of over 20%, indicating significant market concerns regarding its growth prospects.
- Leadership Change: The company announced that HP CEO Enrique Lores will take over as CEO on March 1, replacing Alex Chriss, which may impact the strategic direction of PayPal amid increasing competition in the payments industry.
- Poor Stock Performance: Over the past year, PayPal's stock has plummeted approximately 50%, while the S&P 500 has risen 14%, highlighting its significant underperformance and severely undermining investor confidence in its future outlook.
- Analyst Downgrades: Following the earnings report, multiple Wall Street firms lowered their price targets for PayPal, with Bank of America cutting its target from $68 to $48, reflecting skepticism about its management and business model, suggesting that the stock may remain under pressure in the near term.
See More
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- PayPal Oversold Status: PayPal's RSI is below 11, with shares plummeting over 24% this week, marking its worst weekly performance ever, primarily due to a weak 2026 profit outlook and CEO replacement, indicating market concerns about its future profitability.
- Coinbase Market Performance: Coinbase has an RSI of about 14, with shares down 25% this week linked to a plunge in Bitcoin prices; however, it regained some ground on Friday, and analysts remain optimistic, expecting the stock to double over the next year, reflecting confidence in digital assets.
- KKR Oversold Risk: KKR's RSI is below 20, with shares tracking down more than 13% this week amid fears that AI could disrupt the application software industry, yet most analysts maintain a buy rating, projecting a 53% increase in stock price over the coming year, showcasing investor confidence in its long-term potential.
- Market Sentiment Volatility: Following significant market swings, many stocks have RSIs below 20, indicating widespread overselling, as investors may be looking for buying opportunities at lower prices, reflecting expectations for a future rebound.
See More
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- Executive Change: PayPal's board has decided to fire CEO Alex Chriss and appoint HP's Enrique Lores, effective March 1, reflecting dissatisfaction with current performance and potentially undermining investor confidence.
- Disappointing Financials: For Q4 2025, PayPal's online branded checkout saw only a 1% year-over-year increase in transaction volume, indicating weak consumer spending during the holiday season, while transactions per active account fell by 5%, highlighting significant challenges in retail.
- Intensifying Competition: PayPal faces fierce competition from tech giants like Apple Pay and Google Pay, which dominate distribution through smartphone integration, exacerbating the pressure on PayPal's market position.
- Investor Confidence Shaken: Although PayPal paid its first-ever quarterly dividend of $0.14 per share totaling $130 million in Q4 2024, management's low guidance for adjusted earnings per share in 2026 failed to boost shareholder confidence, raising questions about capital allocation decisions.
See More
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- Walmart Stock Surge: Amid tech stock volatility, Walmart shares rose over 11%, pushing its market valuation above $1 trillion, reflecting investor preference for safer assets and enhancing the company's stability in an uncertain market.
- PayPal's Poor Performance: PayPal shares tumbled more than 20% on Tuesday and are down over 23% for the week after its fourth-quarter earnings and revenue missed analyst expectations, raising concerns about its execution and market share.
- Novo Nordisk Faces Challenges: Novo Nordisk's stock sank over 14% on Tuesday and is down over 21% for the week due to a sales warning indicating pricing pressures in the U.S. market, impacting the performance of its Wegovy product.
- Silicon Labs Acquisition: Silicon Laboratories surged over 48% on Wednesday and is set to end the week around 44% higher following news of its acquisition by Texas Instruments for approximately $231 per share in an all-cash deal, indicating strong market recognition of its growth potential.
See More
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- PayPal's New Initiatives: PayPal plans to launch PayPal World in 2025, allowing users to pay global merchants in local currencies, which is expected to enhance user experience and strengthen market competitiveness.
- AI and Stablecoin Integration: By leveraging AI agents and the stablecoin PYUSD (offering a 4% annual yield), PayPal aims to attract more users and increase transaction volumes, potentially aiding in revenue recovery.
- Block's Growth Potential: Block's Cash App reported $1.62 billion in gross profit in Q3 2025, a 24% year-over-year increase, indicating strong growth potential as it transforms into a comprehensive financial platform.
- Cryptocurrency Strategy: Block launched Square Bitcoin, which automatically converts credit card sales into Bitcoin, and holds approximately 8,800 BTC worth nearly $770 million, further solidifying its position in the cryptocurrency market.
See More
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Dow Jones Milestone: Despite the concerns surrounding AI, the Dow Jones Industrial Average has reached a significant milestone, trading above 50,000 for the first time.
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