PayPal (NASDAQ: PYPL) suffered a sharp decline of above 18% on Tuesday, February 3, falling from $52 to $42 following disappointing fourth-quarter results and issuing weak guidance for the year ahead. 

More specifically, the payments giant reported non-GAAP earnings per share (EPS) of $1.23, below the consensus estimate of $1.29. At the same time, revenue came in at $8.68 billion, falling short of Wall Street’s $8.80 billion forecast. 

The company’s branded checkout segment also grew just 1% during the previous quarter versus 6% a year earlier. Overall payment transactions, on the other hand, increased only 2%, while transactions per active account fell 5%.

Together, these numbers suggest lower customer engagement, all while operating expenses at $7.17 billion, exceeding the $6.91 billion analyst consensus, pressure the margins further.

PayPal stock falls amid leadership changes and weak guidance

In addition to missing Wall Street expectations on revenue and earnings, PayPal also announced a major leadership change.

Namely, PayPal named HP (NYSE: HPQ) veteran Enrique Lores as its next president and CEO, effective March 1, 2026, replacing Alex Chriss. Chriss, who led the company for roughly two and a half years, failed to deliver the execution improvements investors demanded. 

Interim CEO Jamie Miller acknowledged the issue, noting:

“Our execution has not been where it needs to be, particularly in branded checkout. As announced today, the Board’s appointment of Enrique Lores as PayPal’s next President and CEO reflects a clear commitment to strengthening execution, innovation, and results.”

PayPal’s guidance for 2026 likewise deepened investor concerns. Notably, the company expects full-year non-GAAP EPS to decline in the low single digits or remain roughly flat versus 2025’s $5.31, well below the $5.73 average analyst estimate. 

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