PayPal Shares Drop After CEO Exit and Weak 2026 Profit Forecast

NEW YORK, Feb. 3 (GeokHub) — PayPal’s shares tumbled sharply on Tuesday after the payments company announced a surprise leadership change alongside a disappointing profit outlook for 2026, raising fresh concerns about its turnaround strategy amid slowing growth and intensifying competition.

The company said it has replaced Chief Executive Officer Alex Chriss, citing concerns that the pace of execution under his leadership did not meet board expectations. PayPal’s board named Enrique Lores, currently president and CEO of HP, as the company’s new president and CEO. Lores is expected to assume the role on March 1, while Chief Financial Officer Jamie Miller will serve as interim CEO in the meantime.

The unexpected leadership shake-up sent PayPal shares down nearly 19%, marking one of the stock’s steepest single-day declines in recent years.

Chriss had been brought in to stabilize the company during a challenging period marked by post-pandemic normalization in transaction volumes and rising competitive pressure from large technology firms and agile fintech rivals. His departure comes as PayPal struggles to reignite growth in its core payments business.

Muted Outlook Raises Strategy Questions

PayPal forecast flat to slightly lower adjusted profit growth in 2026, a sharp contrast to market expectations of roughly 8% growth. Management also said the company will no longer provide long-term multi-year projections, opting instead to issue guidance on a year-by-year basis.

The outlook reflects growing pressure on consumer spending, as higher interest rates and persistent living costs force households to rein in discretionary purchases. Executives acknowledged softness across PayPal’s retail merchant base, particularly among lower- and middle-income consumers.

“We are seeing broad pressure in retail spending, especially during peak shopping periods,” Miller said during a post-earnings call, adding that PayPal needs to do more to strengthen relationships with key merchants.

Holiday Results Miss Expectations

For the holiday quarter, PayPal reported revenue of $8.68 billion, falling short of market expectations. Adjusted earnings also missed forecasts, underscoring the company’s ongoing challenges in driving profitable growth.

A key concern for investors remains PayPal’s branded checkout business, which offers higher margins but has shown signs of stagnation. Online branded checkout growth slowed to just 1% in the fourth quarter, down from 6% a year earlier, weighed down by weak U.S. retail demand, global headwinds, and tougher year-over-year comparisons.

PayPal executives said the company is taking near-term steps to revive branded checkout momentum, though they stopped short of providing a clear timeline for a broader recovery.

Competitive Pressures Intensify

PayPal continues to face mounting competition from major technology companies expanding deeper into digital payments, raising long-standing concerns about market share erosion despite PayPal’s legacy leadership in online transactions.

Analysts said the sudden CEO transition introduces uncertainty over whether the company will pursue another multi-year operational overhaul or explore strategic alternatives to unlock value.