PayPal Shares Plunge 20% After Earnings Miss and CEO Replacement

TLDR:

PayPal Holdings Inc. shares dropped more than 20% on Tuesday after the payments company reported fourth-quarter earnings and revenue that missed analyst estimates, provided guidance for a profit decline in 2026 and announced the replacement of Chief Executive Alex Chriss with Enrique Lores from HP Inc.

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PayPal Holdings Inc. reported fourth-quarter revenue of $8.68 billion, up 4% from a year earlier but below the $8.79 billion that analysts had expected.

Adjusted earnings per share came in at $1.23 for the quarter ended Dec. 31, short of the $1.29 consensus estimate.

Total payment volume rose 9% to $475.1 billion, while active accounts increased to 439 million.

The San Jose, California-based company also guided for a mid-single-digit decline in both GAAP and non-GAAP earnings per share in the first quarter of 2026.

For the full year, PayPal projected non-GAAP earnings per share to range from a low-single-digit decline to a slight increase compared with $5.31 in 2025.

Shares of PayPal fell as much as 21% during trading on Tuesday, closing at $41.70 and marking the stock's worst single-day drop on record.

The decline erased nearly $10 billion from the company's market value, leaving it at about $39 billion.

The stock reached an intraday low of $41.44, a level last seen in 2017.

PayPal attributed weakness in its branded checkout business to softer U.S. retail spending, international challenges, and difficult comparisons in certain high-growth sectors.

Interim Chief Executive Jamie Miller said "execution has not been where it needs to be," particularly in branded checkout operations.

PayPal named Enrique Lores, who has led HP for six years, as president and chief executive, effective March 1. Lores replaces Alex Chriss, who held the role for about two and a half years.

Newly appointed board chair David Dorman said:

"While some progress has been made in a number of areas over the last two years, the pace of change and execution was not in line with the Board's expectations."

Reportedly, Nancy Pelosi disclosed a $500k sell of PayPal earlier this year, while PayPal's shares have lost nearly half their value over the past 12 months.