PayPal shares fell more than 10% on Thursday after a disappointing forecast increased uncertainty around the payments giant. While the company posted better results in most metrics for its fourth quarter on Wednesday, PayPal posted earnings well below expectations. The company also experienced a slowdown in its user base. PayPal is known for pioneering online payment in the dotcom era. But it faces fierce competition from new entrants such as Apple Pay and has struggled to dominate e-commerce as online shopping moves to mobile phones. PYPL 1D Line PayPal Performance Over the Day Alex Chriss, who took over as CEO last September, admitted that PayPal overhired during the pandemic, lost focus and was doing too much. He called 2024 a transition year and told CNBC in a phone interview that the company remained “conservative” on guidance. Still, investors expect the recovery to take a while and are lowering their expectations while they wait. The average EPS estimate fell 5% after the earnings and less than half of analysts covered the stock with a buy rating, according to FactSet. Just a year ago, two-thirds of analysts were bullish on PayPal. “While we appreciate the energy that PYPL’s new management team brings, for those of us who have intimately documented the past two years, it is no surprise that turning around the titanic that is PYPL is no easy task,” the Wells Fargo analyst said. , Andrew. Bauch said in a note to clients. ‘Show Me’ Stock PayPal’s CEO faced criticism for over-promising ahead of its Jan. 25 product event. The company announced plans for a faster checkout experience using artificial intelligence, calling it the “next chapter” for PayPal. It was the first major announcement for Chriss, who joined PayPal from Intuit. Before that, Chriss told CNBC that PayPal planned to “shock the world.” The products that followed were widely considered disappointing. Gordon Haskett analyst Don Bilson told his clients that the CEO didn’t shock the world: “It’s more like putting them to sleep.” “Their honeymoon period officially ended yesterday with an unforced communication error,” Bilson said. “The gaffe that lowered the stock on Thursday can be attributed to this company presentation in which Chriss gave investors a glimpse of the ‘most impactful innovations’ the company is piloting… The presentation PYPL did not surprise anyone as it did not include any new product announcements or initiatives.” During PayPal’s earnings call on Wednesday, executives highlighted its cost-savings plan and ways to speed up its payment offering. As part of that, PayPal laid off 9% of its workforce in late January in an effort to “drive greater focus and efficiency.” Chriss stressed a conservative approach to guidance, telling CNBC that executives “want to see points on the board” and “really execute on them before we put them into our forward guidance.” In an hour-long call with analysts, he talked about how to earn the trust of the investment community. “As a company, we will regain a track record of delivering on our commitments,” Chriss said. Bank of America described 2024 as a “transitional year” in which PayPal invested some of those recent cost savings. The company’s analysts expect that “the recovery will likely take time.” They lowered their price target by $2 to $64 with a neutral rating on the name, saying valuation and recent sentiment “may offer some downside support.” Deutsche Bank called PayPal a “show me stock.” “The highlight of the call was PYPL’s vision to address many of the persistent issues facing the company and we are now watching progress,” said Bryan Keane, an analyst at Deutsche Bank. “The good news is that the new CEO has a good handle on the problems, but the question remains whether the problems can be fixed or whether the company is structurally deteriorated.” —CNBC’s Michael Bloom contributed to this report.