PayPal has announced a leadership change following a disappointing earnings forecast that resulted in a significant drop in its stock price. Enrique Lores, former board chair, has been appointed as the new chief executive, replacing Alex Chriss, who held the position for less than a year. The board evaluated the company’s progress, stating that while some advancements were made, the pace of execution fell short of expectations.
The digital payments company has adjusted its earnings outlook, now predicting a mid-single-digit decline for the current fiscal year, down from $5.41 a share in 2025, compared to Wall Street’s expectation of $5.60 a share. Additionally, the outlook for the first quarter is also weaker than anticipated. As a result, PayPal’s shares plunged by nearly 20%, reaching their lowest levels since 2014. After peaking at over $300 in mid-2021, the stock has faced ongoing declines largely due to escalating competition in the online payments sector.
Chriss’s appointment in 2023 followed a campaign by hedge fund Elliott Investment Management, which had sought to push for changes in PayPal’s strategy. Analysts had hoped Chriss would enhance the company’s business-to-business software capabilities, but the growth of PayPal’s branded checkout solutions slowed to just 1% in the fourth quarter, attributed to sluggish U.S. retail spending and ongoing international challenges. In the meantime, PayPal’s chief financial officer, Jamie Miller, will serve as interim CEO while the company navigates this transition.
Why this story matters: The leadership shift at PayPal reflects the challenges faced by legacy fintech companies amid growing competition.
Key takeaway: Underperformance in earnings and slower growth in key areas prompted a rapid change in leadership.
Opposing viewpoint: Some analysts believe that Chriss was not given sufficient time to implement his strategies to enhance growth.
