PayPal Faces Challenges Amid Leadership Change
PayPal (NASDAQ: PYPL) is experiencing a significant downturn, with shares trading 86% below their peak as of February 3. The company’s fourth-quarter performance showed online branded checkout growth of only 1% year-over-year, raising concerns amid intensified competition from digital wallets like Apple Pay and Google Pay. CEO Alex Chriss has been replaced by Enrique Lores, formerly of HP, effective March 1, as the company struggles with weak retail trends in the U.S. and a projected decline in adjusted earnings per share in 2026.
In a bid to attract investors, PayPal paid its first-ever quarterly dividend of $0.14 in December, totaling $130 million. However, analysts question the logic behind this decision, suggesting funds would be better utilized in marketing and product development. With a forward price-to-earnings ratio of 9.2, PayPal’s valuation may seem appealing, but fundamental improvements are deemed necessary before it can be considered a sound investment.
