TLDRs;
- PayPal stock falls as CEO change and weak guidance fuel investor caution.
- High-margin branded checkout revenue declines, pressuring overall earnings and market confidence.
- Brokerages downgrade PYPL, citing competition from Apple Pay and Google Pay.
- Investors eye March CEO start and macro data for signs of recovery.
Shares of PayPal (NASDAQ: PYPL) continued their downward trajectory on Thursday, extending losses following a turbulent week for the payments giant.
The stock closed near $39.90, slipping 2.8% as investors absorbed the impact of a CEO shake-up and a disappointing profit outlook for 2026. Volatility has persisted since Tuesday, when PayPal ousted CEO Alex Chriss and unveiled guidance that fell short of market expectations.
The market response highlights investor concerns about the company’s ability to maintain momentum in a rapidly evolving digital payments landscape, particularly as competition intensifies from Apple Pay, Google Pay, and other e-wallet solutions.
Branded Checkout Troubles Hit Margins
Part of the pressure on PYPL stems from a steep slowdown in its branded checkout button business, which typically yields higher margins than unbranded processing.
The company warned that revenue from this segment would decline significantly in 2026, prompting analysts to reassess earnings expectations. PayPal’s fourth-quarter adjusted earnings came in at $1.23 per share on $8.68 billion in revenue, missing forecasts and adding to the stock’s downward momentum.
CEO Transition Sparks Investor Caution
Regulatory filings have clarified the leadership transition, Enrique Lores is set to assume the CEO role on March 1, with a base salary of $1.45 million and equity awards totaling $20 million. Interim CEO Jamie Miller will receive a $3 million cash retention bonus.
The board emphasized that execution speed and alignment with strategic goals have lagged behind expectations. Lores has pledged to accelerate decision-making, improve operational precision, and increase accountability across the company.
Brokerage Downgrades Add Pressure
The stock faced additional headwinds as brokerage firms reassessed their outlooks. Canaccord Genuity downgraded PayPal to “hold,” highlighting the consolidation of e-commerce around platforms that often do not integrate PayPal.
Similarly, HSBC reduced its rating from “buy” to “hold,” slashing the price target from $72 to $47, citing limited confidence in the company’s ability to quickly resolve its branded checkout challenges. Analysts point to the broader competitive landscape and the company’s need for a compelling “next chapter” under Lores.
Looking Ahead: Key Dates and Market Risks
Investor focus now turns to March 1, when Lores officially takes the helm, and the U.S. January jobs report on February 11, which could impact consumer spending and payment volumes. Analysts and traders will monitor whether PayPal can stabilize its operations, regain merchant trust, and navigate rising costs from marketing, incentives, and product enhancements, all amid aggressive competition in digital wallets and installment payment options.
While risks remain, PayPal’s leadership team is betting on strategic partnerships, biometric sign-in technologies, and more streamlined checkout experiences to bolster growth. The weeks ahead will likely determine whether PYPL can regain investor confidence and reverse its recent decline.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
