PayPal Shares Plunge After Earnings Miss And Surprise CEO Shake-Up: HP’s Enrique Lores Tapped To Lead Turnaround

PayPal shocked investors on February 3, 2026, after reporting quarterly results that came in below Wall Street expectations and pairing that disappointment with a major leadership change. The market reaction was swift: shares sank roughly 18%–19% in early trading as traders digested weaker-than-expected performance, cautious profit guidance, and the abrupt exit of CEO Alex Chriss.

What Happened To PayPal Stock On February 3, 2026?

PayPal’s stock drop wasn’t driven by a single headline—it was a one-two punch:

1) The numbers missed expectations. PayPal reported adjusted earnings per share (EPS) of $1.23 on revenue of $8.68 billion for the quarter, both below analyst forecasts cited by multiple outlets.

2) The company signaled a slower path ahead. PayPal’s outlook suggested flat to slightly declining profit in 2026—well under what many analysts had been hoping to see from a business that’s trying to “re-accelerate” growth.

3) The CEO was replaced—unexpectedly. PayPal said Alex Chriss is out, and Enrique Lores (best known as the CEO of HP Inc.) will become PayPal’s next CEO on March 1, 2026.

Key Financial Results: The Numbers Investors Focused On

Revenue And Earnings Missed Forecasts

PayPal posted $8.68 billion in revenue and $1.23 in adjusted EPS, both below consensus estimates reported across major financial news sources. In markets, “missing by a little” can still hurt—especially when a company is already under pressure to prove it can regain momentum.

Guidance: A Big Reason The Stock Sold Off

Forward guidance often matters as much as the quarter that just ended. In PayPal’s case, the company’s profit outlook for 2026 pointed to limited growth at best, and in some commentary it was described as flat to slightly down—a message that clashes with what investors typically want from a mature fintech platform facing intense competition.

The Bigger Problem: Branded Checkout Growth Slowed To A Crawl

One metric kept coming up: branded checkout performance. That’s PayPal’s familiar “Pay with PayPal” button—high-margin, highly visible, and historically a major strength.

Branded Checkout Volume Growth Reportedly Fell To About 1%

Several reports highlighted that PayPal’s branded checkout growth slowed to around 1% in the quarter, down sharply compared with prior periods. When your core product is barely growing, investors start asking hard questions about market share, product design, pricing, and whether competitors are winning the checkout experience.

Why Branded Checkout Matters So Much

Branded checkout is often treated as PayPal’s “heartbeat” because it can be stickier and more profitable than certain unbranded processing services. If branded checkout isn’t expanding, it’s harder to tell a convincing growth story—especially in an industry where customers can switch to a different button or a different wallet with just a few clicks.

Leadership Shake-Up: Alex Chriss Out, Enrique Lores In

On the same day as the earnings release, PayPal announced a major leadership transition:

Enrique Lores—who has led HP Inc. and also served on PayPal’s board—will become PayPal’s president and CEO effective March 1, 2026.

Interim CEO: Jamie Miller Steps In During The Transition

Until Lores officially starts, PayPal’s CFO and COO Jamie Miller is expected to serve as interim CEO. This kind of interim arrangement is common when boards want a clean handoff but still need steady leadership in the meantime—especially during an earnings fallout.

The Board’s Message: “Pace Of Change” Was Not Fast Enough

Reports noted the board’s dissatisfaction with how quickly PayPal was moving. The phrase that stood out was that the pace of change and execution did not meet expectations—language that signals urgency and impatience from the top.

Board Governance: An Independent Chair Named

Alongside the CEO change, PayPal also named David Dorman as independent chair, a governance move that can reassure investors the board is actively steering strategy and oversight.

Why Enrique Lores? What His Background Signals

Enrique Lores is best known for leading a large, global consumer and enterprise brand at HP. PayPal’s decision to bring him in suggests the board wants a leader who can execute a turnaround at scale—tightening operations, simplifying product choices, and sharpening competitiveness.

“Payments Are Changing Faster Than Ever”

In statements cited by coverage, Lores framed the moment as a fast-moving shift driven by technology, regulation, competition, and the accelerating impact of AI on commerce. That messaging is important: it tells investors he sees disruption as the baseline, not the exception, and that PayPal needs to move faster to stay central in digital payments.

What Went Wrong Under Alex Chriss?

It’s worth noting that reports did not suggest the company stood still. Coverage credited Chriss with efforts to improve monetization in key products such as Venmo and to expand areas like Buy Now, Pay Later (BNPL).

Still, the board’s decision implies that progress either wasn’t fast enough or wasn’t showing up in the metrics investors care about most—especially branded checkout growth and profit expectations. When the market is crowded and switching costs are low, “good effort” doesn’t always translate into market confidence.

Competition: Why PayPal’s Moat Looks Smaller Than It Used To

PayPal’s toughest challenge may be that the online checkout and digital wallet space has become intensely competitive. Multiple reports highlighted threats from major tech platforms and fast-moving fintech rivals.

Big Tech And New Fintech Rivals Pressure Checkout

Digital payments are no longer a niche. Consumers can choose from native phone wallets, merchant-driven solutions, and BNPL options built directly into shopping experiences. When alternatives are everywhere, PayPal must win on a few key factors at the same time:

• Convenience: fewer steps at checkout
• Trust: strong security and buyer protections
• Value: rewards, offers, or pricing advantages
• Merchant tools: better conversion and smoother integration

Macro Backdrop: The Consumer Isn’t As Strong As Before

Some coverage also pointed to broader economic headwinds—like pressured household budgets and uneven retail demand—making it harder for a payments company to rely on “organic” growth. If consumers buy less, payment volumes can soften. If merchants tighten spending on marketing and tech, new product rollouts may take longer to pay off.

HP Also Faces A Transition Because Of This Move

Because Lores is coming from HP, his exit affects HP too. One report noted that HP named an interim CEO after Lores’ departure was announced. Market reactions can spill over when leadership changes ripple across multiple large public companies.

Investor Takeaways: Why The Market Reacted So Strongly

PayPal’s single-day slide reflected a mix of fear, uncertainty, and a re-pricing of expectations. Here are the biggest takeaways investors appeared to be making:

1) The Turnaround Timeline Just Got Longer

When guidance is weak and core growth is slow, investors worry the “fix” will take more quarters—and more spending—than previously assumed.

2) The Board Wants A Reset, Not Small Tweaks

A CEO replacement is one of the strongest signals a board can send. It suggests strategy, execution, or both need a sharper shift.

3) Uncertainty Itself Has A Cost

Even if the new CEO is well regarded, transitions create unknowns: Will priorities change? Will product roadmaps be reworked? Will costs rise before improvements show up? Markets tend to “discount” a stock when clarity is low.

What PayPal Might Focus On Next Under Enrique Lores

PayPal hasn’t promised an instant fix, but based on what analysts and reports emphasized, investors will likely watch for concrete steps in several areas:

Improving Branded Checkout Conversion

This could include simpler checkout flows, better wallet experiences, smarter risk controls that reduce false declines, and stronger merchant tools that increase completed purchases. If branded checkout returns to healthier growth, it can change the mood quickly.

Sharper Product Strategy Across Venmo, BNPL, And Commerce Tools

PayPal has valuable consumer brands and merchant relationships. The question is whether the company can package those assets into a clearer, more compelling ecosystem—without confusing customers or spreading investment too thin.

Using AI Without Buzzwords

AI comes up frequently now, but investors are increasingly strict: they want results, not slogans. That means AI features that measurably reduce fraud, increase approvals, personalize offers, and boost conversion for merchants.

What To Watch Next: Dates And Milestones

March 1, 2026: New CEO Start Date

Lores is expected to officially take over on March 1, 2026. Investors will pay close attention to his first public remarks, the first earnings call he leads, and any “first 100 days” plan that outlines priorities.

Next Earnings Call: Early Signals Of Strategy

Even if big changes take time, PayPal can still show progress through leading indicators: branded checkout trends, transaction margins, active accounts quality, and merchant adoption of new features.

Frequently Asked Questions (FAQ)

1) Why did PayPal shares drop about 18%–19%?

Shares fell after PayPal reported quarterly results below expectations, issued a cautious profit outlook for 2026, and announced a CEO change that added uncertainty about the turnaround plan.

2) What were PayPal’s reported quarterly results?

Coverage reported PayPal delivered $8.68 billion in revenue and $1.23 in adjusted EPS, both below analyst expectations cited by major outlets.

3) Who is the new PayPal CEO?

Enrique Lores, previously the CEO of HP Inc. and a PayPal board leader, is expected to become PayPal’s CEO on March 1, 2026.

4) Who is running PayPal until Enrique Lores starts?

PayPal’s CFO and COO, Jamie Miller, is expected to serve as interim CEO during the transition period.

5) What is “branded checkout,” and why is it important?

Branded checkout is PayPal’s signature checkout option (often the “Pay with PayPal” button). It’s a key, often higher-margin part of the business, and reports highlighted that its growth slowed to around 1%—a major concern for investors.

6) Where can I read PayPal’s official earnings materials?

You can find PayPal’s official releases, filings, and investor presentations on its investor relations site here: https://investor.pypl.com/.

Conclusion: A High-Stakes Reset For A Fintech Giant

PayPal’s sharp selloff on February 3, 2026 reflects more than a routine earnings miss—it shows investors are demanding clear proof that the company can win again in a crowded, fast-changing payments market. By appointing Enrique Lores and acknowledging the need for faster execution, the board is signaling that incremental improvements won’t be enough. The next few months—especially leading up to March 1, 2026—will be crucial as PayPal tries to rebuild confidence with stronger growth, clearer strategy, and measurable improvements in its most important products.

Sources (reporting used to rewrite this story): Reuters, AP News, Financial Times, Barron’s, Investopedia, The Wall Street Journal.

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