PayPal (NASDAQ:PYPL), a digital payments platform for merchants and consumers worldwide, closed Tuesday at $41.70, down 20.31%. The stock fell after Q4 2025 earnings and 2026 profit guidance missed expectations, while investors are watching how new leadership and capital-return plans reshape growth and margins.
Trading volume reached 139 million shares, coming in about 792% above its three-month average of 16 million shares. PayPal IPO'd in 2015 and has grown 10% since going public.
How the markets moved today
S&P 500 (SNPINDEX:^GSPC) slipped 0.84% to 6,918, while the Nasdaq Composite (NASDAQINDEX:^IXIC) fell 1.43% to 23,255, reflecting broader selling in growth names. Among credit services stocks, sector rival Fiserv (NASDAQ:FISV) closed at $58.12, down 7.66%, as investors reassessed payment stocks after PayPal’s weak outlook.
What this means for investors
Prior to Tuesday’s market open, PayPal reported its Q4 2025 results, and they fell short of expectations. Revenue of $6.7 billion and adjusted earnings per share (EPS) of $1.23 both missed analysts’ estimates. Making matters worse, management cut its profit outlook for this year and withdrew its 2027 targets. Missing estimates and lowering guidance are a sure-fire way to trigger a stock selloff.
In addition to the financial results, the company also announced the sudden departure of its CEO, Alex Chriss, who will be replaced by Enrique Lores. Lores was serving as CEO of HP (NYSE:HPQ) and also served on PayPal’s Board of Directors.
This is certainly a lot of news for PayPal investors to digest in one day, but it may be worth waiting to see how things shake out. PayPal is still a leader in the digital payments space, and this leadership change is unfortunately what happens when companies fail to meet their own expectations.
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Jeff Santoro has positions in PayPal. The Motley Fool has positions in and recommends HP and PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy.
