PayPal's stock plunges as new CEO is named
PayPal (PYPL) on Tuesday named Enrique Lores as president and CEO, replacing current chief executive Alex Chriss, at a time when Wall Street has grown increasingly bearish on the payments company.
Lores, who is the former CEO of HP (HPE) and has served on PayPal's board for five years - including as chairman since July 2024 - will start on March 1.
In a press release announcing the new appointment, the company said that although "some progress has been made in a number of areas over the last two years, the pace of change and execution was not in line with the Board's expectations."
Chriss was named CEO in 2023, joining PayPal from Intuit. Jamie Miller, chief financial and operating officer, will serve as interim CEO until Lores joins the company next month.
The leadership change did nothing to assuage investors as PayPal's stock plunged 20.3% on Tuesday. It has plummeted 53.4% over the past 12 months.
Under Chriss's leadership, PayPal entered into or expanded partnerships with some of the biggest names in tech last year, including Google (GOOG), OpenAI and Coinbase (COIN). It also began implementing agentic AI into its services, while its subsidiary Venmo has now been deployed in the mortgage space.
The company also entered into a multi-year partnership with Blue Owl Capital for its Buy Now, Pay Later (BNPL) services.
But PayPal's board was clearly looking for a leader to take the company in a new direction than where Chriss was steering it.
"The Board has a fundamental belief that PayPal's long-term success is grounded in its global scale, data, and the strength of its consumer, merchant, and partner relationships, combined with the quality and speed of its execution," the company said in a statement.
"In an increasingly competitive landscape, the company's value proposition is delivered through the combined power of its two-sided platform, operational rigor, risk capabilities, and developer experience."
Analyst sees 'structural erosion' of PayPal's competitive edge
Despite the progress Chriss made in some areas of its business, Wall Street downgraded its stock three times in the first two weeks of December and then again in the first week of the new year.
Analysts seem to increasingly share a similar take on PayPal's stock: While the company took steps in 2025 to ensure growth, the gains are not going to be realized immediately.
And last week, PayPal's shares got downgraded again. Rothschild & Co Redburn analyst Fahed Kunwar changed his rating to Sell from Neutral and cut his price target to $50 from $70, citing "structural erosion of PayPal's edge" among other reasons.
"While PayPal should, in theory, be well-positioned for agentic commerce given its scale and trusted credentials, we see this advantage eroding as consumer behavior shifts," Kunwar said. "PayPal's active user base of 400 million remains the largest of the payment business, but the marginal consumer is increasingly choosing alternative payment methods."
Complicating things for PayPal is the fact that it reported fourth-quarter earnings on Tuesday that fell below Wall Street's expectations.
The company reported $1.23 earnings per share (EPS), compared to analyst expectations of $1.29, and revenue of $8.68 billion, versus Wall Street's expectation of $8.79 billion.
As Lores is set to take over as CEO in March, one order of business will be restoring Wall Street's confidence in PayPal.
"We will further strengthen the culture of innovation necessary to deliver long-term transformation and balance this with near-term delivery, executing with greater speed and precision, and holding ourselves accountable for consistent delivery quarter on quarter, to further assert PayPal's industry leadership position," he said in a statement.