PayPal CEO Exit Coincides With Weakest Quarterly Performance in Years; Investors Question Timing of Leadership Announcement

Rhea-AI Summary

PayPal (NASDAQ: PYPL) reported disappointing Q4 2025 results and announced CEO Dan Schulman will depart, with HP veteran Enrique Lores named successor.

Q4 revenue was $8.68B vs $8.80B consensus; adjusted EPS was $1.23 vs $1.30-1.33 expected. 2026 guidance calls for a year‑over‑year EPS decline. Shares fell 16-17% to about $53, trading volume spiked ~3-4x. Rothschild & Co Redburn downgraded the stock, cutting its price target to $50 from $70.

Positive

• Named experienced successor Enrique Lores (former HP CEO)
• Highly increased trading volume (~3-4x) improves intra-day liquidity

Negative

• Q4 revenue missed consensus at $8.68B
• Adjusted EPS missed at $1.23 versus $1.30–1.33 expected
• 2026 guidance forecasts a year‑over‑year EPS decline
• Shares fell 16-17% to a 12-month low near $53
• Rothschild & Co downgraded rating and cut price target to $50 from $70

Key Figures

Q4 2025 revenue: $8.68 billion Q4 revenue consensus: $8.80 billion Adjusted EPS: $1.23 per share +5 more

8 metrics

Q4 2025 revenue $8.68 billion Reported on February 3, 2026

Q4 revenue consensus $8.80 billion Analyst estimate referenced in article

Adjusted EPS $1.23 per share Q4 2025 results

EPS expectations $1.30–$1.33 per share Analyst range for Q4 2025 EPS

Intraday 1-day drop 16–17% Share reaction after Q4 results and CEO news

12-month low level around $53 Level reached after announcements

Price target cut $70 to $50 Rothschild & Co Redburn downgrade on January 28

2025 TPV $1.79 trillion Total payment volume in 2025 from 10-K

Market Reality Check

Price: $40.81 Vol: Volume 20,273,353 vs 20-d...

low vol

$40.81 Last Close

Volume Volume 20,273,353 vs 20-day average 29,405,967 (relative volume 0.69). low

Technical Trading below 200-day MA of 65.96, about 48.67% below 52-week high 79.5 and 6.11% above 52-week low 38.46.

Peers on Argus

PYPL was up 1.29% while key credit/fintech peers were mixed: SOFI +0.52%, SYF +2...

PYPL was up 1.29% while key credit/fintech peers were mixed: SOFI +0.52%, SYF +2.42%, AXP +1.71%, ALLY +0.27%, COF -0.37%. Scanner shows no coordinated sector momentum, suggesting stock-specific dynamics around prior earnings and leadership news rather than a broad industry move.

Historical Context

5 past events · Latest: Feb 12 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 12	AI partnership	Positive	-3.4%	Announced agentic AI travel partnership with Sabre and Mindtrip.
Feb 11	Outlook investigation	Negative	-2.5%	Investigation into disappointing 2026 outlook and risk disclosures timing.
Feb 04	Weak 2026 outlook	Negative	-2.8%	2026 outlook fell short; probe of gap between statements and results.
Feb 03	Q4/FY25 earnings	Neutral	-20.3%	Reported Q4 and full-year 2025 results and hosted earnings webcast.
Feb 03	CEO transition	Neutral	-20.3%	Announced Enrique Lores as CEO and David W. Dorman as Board Chair.

Pattern Detected

Recent company-specific news, including weak outlook and leadership changes, has often been followed by negative price reactions, even on seemingly strategic partnerships.

Recent Company History

Over the past weeks, PYPL has faced a series of challenging updates. On Feb 3, fourth quarter and full-year 2025 results and a leadership transition drove a -20.31% move, with separate CEO appointment news the same day sharing that reaction. Subsequent investigations into the weak 2026 outlook on Feb 4 and Feb 11 saw further declines of -2.75% and -2.48%. Even a strategic AI travel partnership on Feb 12 coincided with a -3.41% move, indicating a market skewed toward skepticism.

Market Pulse Summary

This announcement focuses on legal scrutiny following weak Q4 2025 results, an earnings miss versus ...

Analysis

This announcement focuses on legal scrutiny following weak Q4 2025 results, an earnings miss versus the $8.80 billion revenue consensus, and a disappointing EPS outcome of $1.23 against expectations of $1.30–$1.33. It also revisits the abrupt leadership change to Enrique Lores. Historically, related earnings and governance headlines drove sizable declines, including a -20.31% move on prior results and CEO news. Investors may watch future disclosures, competitive trends, and subsequent filings for how these issues evolve.

Key Terms

buy-now-pay-later

1 terms

buy-now-pay-later financial

"including Block's Square, Stripe, Apple Pay, and buy-now-pay-later services like Affirm"

Buy-now-pay-later is a short-term financing option that lets shoppers split a purchase into a series of smaller, scheduled payments—often interest-free if paid on time—handled by a lender or the seller at checkout. For investors, BNPL is like giving customers a temporary, easier-to-use credit card: it can lift sales and customer loyalty but also increases exposure to missed payments, regulatory limits, and shifts in consumer spending, all of which affect revenue and risk.

AI-generated analysis. Not financial advice.

NASDAQ: PYPL

NEW YORK, Feb. 18, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP is investigating PayPal Holdings, Inc. (NASDAQ: PYPL) following the company's simultaneous announcement of disappointing fourth quarter results and the departure of CEO Dan Schulman, with HP veteran Enrique Lores named as his successor. Investors who purchased PayPal shares and suffered losses may obtain more information about this investigation by clicking here.

The digital payments industry has undergone significant transformation since PayPal's separation from eBay in 2015. What was once a dominant force in online checkout has faced mounting competition from newer entrants including Block's Square, Stripe, Apple Pay, and buy-now-pay-later services like Affirm and Klarna. According to industry analysts at Rothschild & Co Redburn, the "marginal consumer" has increasingly moved away from PayPal's platform toward alternatives offering better merchant economics or tighter integration with mobile ecosystems.

On February 3, 2026, PayPal reported fourth quarter 2025 revenue of $8.68 billion, falling short of the $8.80 billion consensus estimate. Adjusted earnings came in at $1.23 per share, below analyst expectations of $1.30 to $1.33 per share. The company also disclosed that 2026 would see a year-over-year decline in earnings per share, substantially below prior Wall Street forecasts of continued growth.

The leadership transition announcement was particularly notable for its timing. CEO succession planning at public companies typically involves multi-quarter preparation periods with clear transition milestones. The simultaneous disclosure of Schulman's departure alongside the company's weakest guidance in recent memory raised questions among market observers about when the board and management first became aware of both the performance shortfall and the need for new leadership.

Following the announcements, PayPal shares declined 16-17% in early trading, reaching a new 12-month low around $53. Trading volume spiked to approximately three to four times the 30-day average. The stock had already been under pressure following a January 28 downgrade from Rothschild & Co Redburn, which cut its price target to $50 from $70 and moved its rating to Sell.

Shareholders who purchased PayPal stock during the period in question and wish to discuss their legal rights may click here to learn more about this investigation.

Levi & Korsinsky, LLP is a nationally recognized firm with offices in New York, California, Connecticut, and Washington, D.C. that prosecutes securities, consumer, and shareholder class actions on behalf of investors (www.zlk.com).

CONTACT:

Joseph E. Levi, Esq.
Levi & Korsinsky, LLP
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
Email: jlevi@levikorsinsky.com
www.zlk.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/paypal-ceo-exit-coincides-with-weakest-quarterly-performance-in-years-investors-question-timing-of-leadership-announcement-302680877.html

SOURCE Levi & Korsinsky, LLP

FAQ

Why did PayPal (PYPL) shares drop 16-17% on February 3, 2026?

Shares dropped due to Q4 misses and weak 2026 guidance. According to the company, Q4 revenue was $8.68B and adjusted EPS was $1.23, below analyst expectations, and guidance projects a year‑over‑year EPS decline.

What were PayPal's Q4 2025 revenue and EPS versus consensus for PYPL?

PayPal reported Q4 2025 revenue of $8.68B and adjusted EPS of $1.23. According to the company, both metrics missed consensus estimates of about $8.80B and $1.30–1.33 per share.

Who is replacing Dan Schulman as PayPal CEO and what is their background?

Enrique Lores will succeed Dan Schulman as CEO at PayPal. According to the announcement, Lores is an HP veteran with senior executive experience, positioned to lead PayPal through competitive pressures and strategic review.

How did analysts react to PayPal's February 2026 announcements for PYPL?

Analysts reacted negatively with downgrades and a lower price target. Rothschild & Co Redburn cut its target to $50 from $70 and moved to Sell after the results and guidance miss.

What did PayPal say about 2026 EPS expectations in the February 2026 release?

PayPal said 2026 will see a year‑over‑year EPS decline. According to the company, this guidance marks a material slowdown versus prior Wall Street forecasts of continued EPS growth.

Is there any investor investigation related to PayPal's February 2026 announcements for PYPL?

Yes, a securities firm announced an investigation into PayPal following the simultaneous earnings and CEO departure announcements. The firm is contacting investors who purchased shares and experienced losses during the period in question.