Published: February 4, 2026
PayPal (NASDAQ: PYPL) shares cratered 19% in after-hours and extended-hours trading following its Q4 2025 earnings release on February 3, 2026, closing the session around $42.60 — the lowest level since mid-2020. The sharp drop erased more than $12 billion in market value and triggered widespread concern among investors already frustrated with the company’s post-pandemic growth slowdown.
The sell-off was sparked by two major disappointments: a revenue and EPS miss for Q4, coupled with surprisingly soft 2026 guidance, and the abrupt announcement that CEO Alex Chriss would step down, with HP Inc. CEO Enrique Lores named as his replacement effective March 1, 2026. This article breaks down the earnings results, the underlying causes of weakness, the CEO transition implications, market reaction, and realistic scenarios for PayPal stock in the months ahead.
Q4 2025 Earnings Breakdown – Miss on Multiple Fronts
| Metric | Q4 2025 Actual | Consensus Estimate | YoY Change | Beat/Miss |
|---|---|---|---|---|
| Total Revenue | $8.68 billion | $8.80 billion | +6% | Miss (~1.4%) |
| Non-GAAP EPS | $1.23 | $1.29 | +8% | Miss (~4.7%) |
| Total Payment Volume (TPV) | $423 billion | $428–$430 billion | +7% | Miss |
| Branded Checkout TPV Growth | +1% | +4–6% | Sharp deceleration | Significant miss |
| 2026 Revenue Guidance (midpoint) | Flat to slight decline | +8–10% | — | Well below expectations |
Source: PayPal Q4 2025 earnings release, analyst consensus aggregates (Bloomberg, FactSet, Yahoo Finance – February 2026)
Key Reasons Behind the Earnings Miss
PayPal cited several structural and cyclical headwinds:
- U.S. consumer spending weakness: Branded checkout (PayPal, Venmo buttons on merchant sites) grew only 1% year-over-year — the slowest pace in company history — as U.S. retail and e-commerce traffic softened.
- Competitive pressure: Apple Pay, Google Pay, Shop Pay, Affirm, Klarna, and BNPL providers continue to erode PayPal’s share of online checkout.
- Macro environment: Higher interest rates and persistent inflation squeezed discretionary consumer spending, especially among PayPal’s core small-business and individual users.
- Branded checkout deceleration: Venmo growth slowed sharply; many merchants shifted to lower-fee alternatives or in-house solutions.
- Guidance shock: 2026 outlook calling for flat-to-declining revenue (vs consensus +8–10%) shocked investors who expected stabilization or modest re-acceleration.
CEO Transition – Alex Chriss Out, Enrique Lores In
In a surprise move, PayPal announced that CEO Alex Chriss — who took over from Dan Schulman in late 2023 — would step down effective March 1, 2026. He will be replaced by Enrique Lores, current CEO of HP Inc. (HPQ).
Key points on the transition:
- Chriss led turnaround efforts including cost-cutting, Venmo monetization, and crypto wallet expansion — but results remained inconsistent.
- Lores brings extensive experience scaling consumer hardware/software businesses (HP printers, PCs, services) and driving profitability under pressure.
- Market reaction to the CEO change was mixed: some viewed it as a positive signal of renewed focus on execution; others saw it as an admission that Chriss’s strategy failed to deliver.
Market Reaction & Technical Picture (February 3–4, 2026)
PYPL stock gapped down 19% at the open on February 4, trading as low as $42.10 before partial recovery attempts toward $43.50–$44.00.
- Support levels: $42.00 (multi-year low zone), $38–$40 (2020 pandemic levels if breached)
- Resistance: $50–$52 (prior breakdown area), $55 (200-day SMA)
- RSI (daily): deeply oversold (~18–22) → potential short-term bounce candidate
- Volume: massive spike on the drop — classic capitulation signature
What’s Next for PayPal Stock in 2026?
Near-term outlook remains cautious:
- Continued pressure on branded checkout and U.S. consumer spending
- Uncertainty around new CEO Lores’s strategic direction (cost cuts vs growth bets)
- Competition from Apple Pay, Google Pay, Block, Affirm, Klarna, and BNPL players
- Potential for activist pressure or break-up speculation if turnaround stalls
Longer-term positives include:
- Global scale (400M+ active accounts)
- Venmo monetization potential (advertising, credit products)
- Crypto wallet & stablecoin initiatives (PYUSD growth)
- Cost discipline already underway → margin expansion runway
Trading & Positioning Considerations on Tapbit
- Sign Up on Tapbit (0% maker fees)
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- Short-term bounce play: Long PYPL/USDT (or proxy via fintech ETF) on oversold RSI bounce above $44–$45 with tight stops below $42
- Volatility hedge: Use options or perps for defined-risk exposure around March 2026 earnings
- Sector rotation: Pair short PYPL with long competitors (Block, Affirm, Apple) if branded checkout weakness persists
- Risk control: Max 1–2% account risk per trade; isolated margin; trailing stops below recent lows
FAQs – PayPal Earnings Miss & CEO Transition (February 2026)
Why did PayPal stock drop 19%?
Q4 revenue ($8.68B) and EPS ($1.23) missed estimates, branded checkout growth slowed to +1%, and 2026 guidance disappointed (flat/decline vs +8–10% expected). CEO transition added uncertainty.
Who is the new PayPal CEO?
Enrique Lores, current CEO of HP Inc., will replace Alex Chriss effective March 1, 2026. Lores brings experience scaling consumer technology businesses under profitability pressure.
Is PayPal stock a buy after the crash?
$42–$44 offers better risk/reward for contrarian entries if conviction is high. Wait for stabilization above $50 and clearer turnaround signals before aggressive longs. Below $40 risks deeper test toward $35–$38.
What should investors watch next?
Enrique Lores’s strategy comments (March 2026 earnings), branded checkout re-acceleration, Venmo monetization progress, PYUSD stablecoin adoption, and activist/strategic review speculation.
Conclusion & 2026 Outlook for PayPal
PayPal’s 19% stock plunge on February 4, 2026 — triggered by a Q4 earnings miss, weak 2026 guidance, and the surprise CEO transition from Alex Chriss to Enrique Lores — reflects deep investor frustration with the company’s post-pandemic growth trajectory. Branded checkout deceleration, U.S. consumer weakness, and intensifying competition from Apple Pay, BNPL providers, and fintech rivals remain the core structural challenges.
That said, PayPal still possesses massive scale (400M+ active accounts), improving cost discipline, Venmo monetization runway, and PYUSD stablecoin potential. The new CEO’s track record at HP suggests a sharper focus on profitability and execution — which could stabilize the business even if top-line growth remains modest.
Tapbit provides efficient ways to trade PayPal volatility and the broader fintech theme: 0% maker fees on major pairs, deep liquidity, up to 125x leverage on perpetuals, and fast fiat ramps. Watch March 2026 earnings for Lores’s initial strategy remarks, branded checkout re-acceleration signals, and any activist/strategic review developments — PayPal remains one of the most-watched turnaround stories in fintech for 2026.
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Disclaimer: Stock and cryptocurrency trading involve significant risk of loss. Prices are highly volatile and can change rapidly. Earnings results and CEO transitions do not guarantee future performance. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
