PayPal shares fell nearly 20% on Tuesday after the company released weak financial results and disclosed a leadership change, putting the stock among the session’s worst performers on Wall Street. The stock was trading around $42.19, far below its all-time high of $300, and the article said it had dropped to its lowest level since April 2017. Market capitalization has also collapsed, falling from more than $386 billion to about $40 billion.
Revenue grew, but guidance pointed to slower profit momentum
In the fourth quarter, PayPal reported revenue of $8.7 billion, up 4% year over year. Operating income rose 5% to $1.5 billion. Those figures still showed growth, but investors focused on the company’s outlook instead. PayPal said revenue and profit growth were expected to keep slowing as competition intensified. Its guidance called for first-quarter earnings per share to decline by the mid-single digits, and the same type of decline is expected for full-year EPS.
The softer outlook came with a management reshuffle. According to the source material, Alex Chriss has been replaced by Enrique Lores, an executive from HP. Until Lores takes over, CFO and Chief Operating Officer Jamie Miller will serve as interim CEO. The company said that while progress had been made in several areas over the last two years, the pace of change and execution did not match the board’s expectations.
Stablecoins join big tech and fintech rivals in the competitive mix
PayPal has been dealing with slower growth for years while facing heavier competition across both its branded and unbranded businesses. The article named Klarna, Affirm, Google, and Apple as major rivals. It also highlighted stablecoins as a growing source of pressure, specifically USDT, RLUSD, and USDC. Some users and companies are choosing stablecoin transactions because they are fast and convenient.
PayPal has tried to build a position in that segment with PYUSD, whose supply has risen to more than $3.6 billion. Even so, monetization remains a challenge. The report said the GENIUS Act limits how stablecoin companies can make money, allowing them to invest only in short-term U.S. government bonds.
Low valuation has not stopped the chart from weakening
PayPal’s valuation has compressed sharply. The stock trades at a forward price-to-earnings ratio of about 9.77, well below the 22 average cited for the S&P 500. That discount has not been enough to stabilize the shares.
On the technical side, the weekly chart in the source showed a strong downtrend in recent weeks, with the stock sliding from a 2025 high of $83.20 to about $42. The article said the decline coincided with an inverted cup-and-handle pattern and a head-and-shoulders formation. The stock remains below all moving averages, while the Relative Strength Index keeps falling. The piece said the more likely near-term outcome is continued weakness, though a rebound is still possible as investors wait to see Lores’ turnaround plan.