Bear Market Sell-Off: Is PayPal Stock a Buy After Its 20% Plunge?

Published: Thursday, February 19, 2026 at 10:20 am

PayPal Stock Plunges: Is Now the Time to Buy?

Digital payments giant PayPal has experienced a significant downturn, with its stock price plummeting following the release of its fourth-quarter 2025 financial results. The stock immediately fell 20% after the report, contributing to a 30% decline for the year as of February 17th. This places the stock firmly in bear market territory, trading approximately 87% below its record high.

Several factors appear to be driving investor concern. A key development is the upcoming leadership change. Enrique Lores, currently the CEO of HP and a member of PayPal's board, is set to take over as CEO. This transition comes as a surprise, as the current CEO, Alex Chriss, is stepping down at the end of the month after leading the company for 2.5 years.

Furthermore, PayPal's financial outlook for 2026 has disappointed investors. The company forecasts adjusted earnings per share to range from a "low-single digit decline to slightly positive," a projection that falls short of analysts' expectations for an 8% gain.

Despite the negative sentiment, there are potential positives. PayPal operates a two-sided payment platform with 231 million monthly active accounts, benefiting from a network effect. The company also generates substantial free cash flow, totaling $5.6 billion in 2025. Management plans to repurchase $6 billion worth of shares this year, a move that could be seen as a positive given the stock's current valuation, which trades at a price-to-earnings ratio of 7.5.

However, the challenges facing PayPal are considerable. The payments industry is highly competitive, and the company's recent performance has not inspired confidence. The current CEO's efforts to drive growth have not yielded the desired results. The future success of the new CEO is uncertain, and without a significant acceleration in revenue growth and user engagement, it will be difficult to shift market sentiment.

BNN's Perspective: While the stock's low valuation and share repurchase plans are attractive, the leadership transition and disappointing outlook raise concerns. Investors should carefully weigh the risks and potential rewards before considering an investment in PayPal.

Keywords: PayPal, PYPL, stock, investment, financial results, bear market, CEO, earnings, revenue, buyback, valuation, fintech, digital payments

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