PayPal $PYPL ( ▼ 20.31% ) shares are getting crushed after a rough earnings report that missed expectations, delivered a weak profit outlook for 2026, and revealed an unexpected leadership change. The combination was too much for investors, sending the stock sharply lower in premarket trading.
This was not just a small stumble. It hit on growth, profits, and management all at once.
Growth Slows Where It Matters Most
In Q4, PayPal reported revenue of $8.7 billion, up 4% year over year but below the $8.8 billion analysts expected. Adjusted earnings per share came in at $1.23, also missing forecasts of $1.28.
The bigger issue was the core business. PayPal’s branded checkout segment, a key driver of its online payments ecosystem, grew just 1% in the quarter. That is a sharp slowdown from 6% growth a year earlier and well below what the company had hoped for. Management pointed to softer US retail spending and weaker e-commerce momentum as major drags.
2026 Outlook Raises Red Flags
PayPal’s forecast for 2026 did little to calm nerves. The company said full-year adjusted profit could decline in the low single digits or be only slightly positive. That is a far cry from Wall Street’s expectations for around 8% growth.
When a payments company signals flat or falling profits, it suggests competition, spending trends, or both are weighing more heavily than expected.
Leadership Reset and a Banking Bet
Adding to the uncertainty, PayPal announced that CEO Alex Chriss will be replaced by Enrique Lores, currently CEO of HP, starting March 1. The board said progress had been made but not at the pace it wanted, signaling a desire for faster change.
At the same time, PayPal is trying to evolve beyond pure payments. In December, the company applied to become a US bank through regulators, a move that would help expand its small-business lending operations alongside its existing European banking license. Investors, for now, seem more focused on the near-term slowdown than the long-term pivot.