PayPal (PYPL) stock dove 20% in Tuesday afternoon trading, reflecting its weaker-than-anticipated Q4 results, soft guidance for 2026, and market share losses, especially in its branded checkout offerings. Shares sank to as low as $41.44 during the session, its lowest level since 2017.
“This was a disappointing result, a function of growing competition and suboptimal execution amid soft macro dynamics, particularly for middle-income demos that management noted as core to the PayPal brand on this morning’s call,” Macquarie analyst Paul Golding wrote in a note to clients.
Challenges in branded checkout, along with operational and deployment issues, U.S. retail weakness among lower- and middle-income consumers, moderation in Germany, and deceleration in categories such as travel, crypto, gaming, and ticketing, drove the Q4 miss, Golding said.
Branded checkout total payment volume growth, excluding FX, rose only 1% Y/Y, slowing from 6% growth in Q4.
BTIG analyst Andrew Harte said Q4 results missed across the board. Furthermore, FY26 guidance “looks very bad, is not near consensus, and implies PYPL is clearly losing market share.”
BTIG noted that PayPal (PYPL) is losing market share in its branded and unbranded solutions.
The disappointing results underscore increasing competition in e-commerce payments as businesses seek benefits from e-comm tailwinds pushing more commerce shifts to online, Harte said. In that arena, closely held Stripe (STRIP) and Adyen (ADYEY) (ADYYF) are showing their ability to execute at scale, he said. Meanwhile, consumers have more choices than ever, including Apple Pay (AAPL) and dozens of other digital wallets, and Block’s (XYZ) Cash App engagement stats continue to increase.
“PYPL’s valuation now screams cheap at a 15% FY26E FCF yield,” BTIG’s Harte said. “However, we do not see how investors can feel confident on the long side.” Interim CEO Jamie Miller said the company had underestimated its operational and deployment challenges for modern experiences with merchants. Moreover, changing the spending habits of ~400M active users also proved more challenging than anticipated.
PayPal’s new CEO, who comes on board in March, has his work cut out for him. The CEO transition wasn’t a surprise but came sooner than he expected, Evercore ISI analyst Adam Frisch said.
“While certainly a reputable executive, the big question is whether he will bring in a formidable payments team to attempt yet another multi-year turnaround or look to start reviewing options for strategic assets,” Frisch wrote in a note to clients.
“Enrique will help accelerate execution and bring greater discipline to how we implement our strategic priorities as we enter our next phase of growth,” PayPal said in its letter to shareholders. Interim CEO Miller said, “We are fully aligned on the path forward as PayPal enters its next chapter of growth.”
“We are focused on delivering a best-in-class experience by driving adoption of biometric login methods and scaling our redesigned paysheet, improving presentment to surface PayPal early, and strengthening selection through rewards, BNPL, and the PayPal app,” the company said.