PayPal (NASDAQ:PYPL) Shares Down 20.3% After Earnings Miss

PayPal Holdings, Inc. (NASDAQ:PYPL) was down 20.3% on Tuesday after the company announced weaker than expected quarterly earnings. The stock traded as low as $41.43 and last traded at $41.70. Approximately 140,808,409 shares were traded during mid-day trading, an increase of 545% from the average daily volume of 21,828,143 shares. The stock had previously closed at $52.33.

The credit services provider reported $1.23 earnings per share for the quarter, missing the consensus estimate of $1.29 by ($0.06). PayPal had a net margin of 14.96% and a return on equity of 25.64%. The firm had revenue of $8.68 billion for the quarter, compared to analysts’ expectations of $8.82 billion. During the same period in the previous year, the company earned $1.19 EPS. The company’s quarterly revenue was up 4.0% on a year-over-year basis.

Key Stories Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Board names experienced external leader Enrique Lores as incoming CEO (effective March 1), which could speed execution and strategic change over time. PayPal hires HP’s Enrique Lores as its new CEO
• Positive Sentiment: Some bullish analysts see the selloff as a buying opportunity and at least one firm (Macquarie) kept an Outperform view and a high price target, signaling pockets of conviction among institutional investors. Benzinga – Macquarie Outperform
• Neutral Sentiment: Underlying volumes remained positive: Total payment volume (TPV) grew year‑over‑year (mid‑single to high‑single digits in Q4), showing continuing demand even as checkout metrics soften. PayPal in Charts: Total Payment Volume rose 8.5% Y/Y in Q4
• Negative Sentiment: Q4 EPS and revenue missed Street expectations (adjusted EPS ~$1.23 vs. ~$1.29 expected; revenue ~$8.68B vs. ~$8.8B), and management issued a weaker 2026 profit outlook — the primary catalyst for the sharp selloff. PayPal Is Plunging 14% As Profits Come Up Short
• Negative Sentiment: Surprise leadership change (Alex Chriss stepping down; interim CEO until Lores starts) intensified investor concern about execution and strategy execution, amplifying volatility. PayPal Stock Sinks After Company Warns of Earnings Drop and Names New CEO
• Negative Sentiment: Analyst downgrades, big market‑cap losses and active securities‑fraud/shareholder investigations and law‑firm outreach are increasing headline risk and may prolong downside pressure. Securities Fraud Investigation Into PayPal Announced

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on PYPL. HSBC reduced their target price on PayPal from $93.00 to $72.00 and set a “buy” rating on the stock in a research note on Tuesday, January 27th. Bank of America reissued a “neutral” rating and set a $68.00 price objective (down from $93.00) on shares of PayPal in a research report on Thursday, December 11th. TD Cowen restated a “hold” rating on shares of PayPal in a report on Tuesday. Evercore ISI set a $40.00 target price on shares of PayPal in a research report on Tuesday. Finally, Needham & Company LLC reaffirmed a “hold” rating on shares of PayPal in a research note on Tuesday. Twelve research analysts have rated the stock with a Buy rating, twenty-six have given a Hold rating and five have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and an average target price of $71.75.

Insider Activity at PayPal

In other news, insider Suzan Kereere sold 4,162 shares of the business’s stock in a transaction that occurred on Wednesday, November 19th. The shares were sold at an average price of $59.84, for a total transaction of $249,054.08. Following the completion of the transaction, the insider directly owned 30,983 shares of the company’s stock, valued at $1,854,022.72. The trade was a 11.84% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Aaron Webster sold 9,282 shares of the business’s stock in a transaction on Monday, November 10th. The shares were sold at an average price of $66.29, for a total transaction of $615,303.78. Following the sale, the executive vice president owned 35,699 shares of the company’s stock, valued at approximately $2,366,486.71. This represents a 20.64% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 0.08% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the business. Hilltop National Bank purchased a new position in PayPal during the second quarter valued at approximately $27,000. MUFG Securities EMEA plc raised its position in shares of PayPal by 100.4% during the 2nd quarter. MUFG Securities EMEA plc now owns 385 shares of the credit services provider’s stock valued at $29,000 after purchasing an additional 87,524 shares during the period. Cloud Capital Management LLC purchased a new position in shares of PayPal during the 3rd quarter valued at $30,000. Kelleher Financial Advisors bought a new position in PayPal in the 3rd quarter worth $30,000. Finally, Torren Management LLC purchased a new stake in PayPal in the 4th quarter worth $31,000. 68.32% of the stock is currently owned by institutional investors.

PayPal Price Performance

The stock has a 50 day simple moving average of $58.48 and a 200-day simple moving average of $65.01. The firm has a market cap of $39.02 billion, a PE ratio of 8.36, a price-to-earnings-growth ratio of 0.65 and a beta of 1.43. The company has a current ratio of 1.34, a quick ratio of 1.34 and a debt-to-equity ratio of 0.56.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.