[New York Active Stock] PayPal Plunges 20% on Weak Earnings

PayPal's share price plunged. The drop is seen as the result of both its weak earnings in the fourth quarter of last year and its growth outlook for this year failing to meet market expectations.

On the 3rd (local time), PayPal closed at 41.70 dollars, down 10.63 dollars (20.31%) from the previous trading day. In after-hours trading following the close, the stock rebounded slightly.

That day, PayPal reported earnings that fell short of market expectations. Revenue in the fourth quarter of last year was 8.676 billion dollars, up 4% from the same period a year earlier. However, it missed the 8.8 billion dollar forecast compiled by market research firm LSEG. Adjusted earnings per share (EPS) came in at 1.23 dollars, below the consensus estimate of 1.28 dollars.

The lowered earnings outlook for this year is also cited as a reason for the stock's weakness. PayPal projected that this year's adjusted EPS will either decline or show only a slight increase. This is far below the roughly 8% growth forecast compiled by LSEG.

The chief executive officer (CEO) has also been replaced. PayPal announced that former CEO Alex Chriss, who took office in September 2023, will step down and that former HP CEO Enrique Lores will take over. PayPal's board of directors explained the change by saying that, despite some progress, the overall pace of change and execution had not met expectations.

This content was produced with the assistance of AI translation services.