PayPal Holdings, Inc. Class Action Lawsuit – PYPL

Introduction to PayPal Holdings, Inc. (PYPL) Securities Class Action Lawsuit

A federal securities fraud class action has been filed against PayPal Holdings, Inc. (NASDAQ: PYPL) under the federal securities laws for investors who bought common stock between February 25, 2025 and February 2, 2026. Investors allege the company touted aggressive financial targets and a strong growth trajectory for its core Branded Checkout business and 2027 guidance while concealing that its salesforce and operations were not equipped to deliver.

The complaint says PayPal's leaders repeatedly projected strength and execution during 2025. The truth surfaced on February 3, 2026, when PayPal reported disappointing results in its Q4 2025 earnings report, withdrew its 2027 targets, announced a sudden CEO transition, and admitted execution and deployment failures. The stock fell hard-down 20.31% in one day-from $52.33 on February 2, 2026 to $41.70 on February 3, 2026.

“Most PYPL shareholders never file or join the class action, which means they miss out on potential recovery funds,” said Attorney Joseph Levi.

PayPal Holdings, Inc. (PYPL) Securities Lawsuit Case Details

Case Name: Goodman v. PayPal Holdings, Inc. et al.
Case No.: 3:26-cv-01381
Jurisdiction: U.S. District Court, Northern District of California
Filed on: February 17, 2026

PayPal Holdings, Inc. (PYPL) Company Profile

PayPal enables digital payments as a publicly traded technology platform through a two-sided network that connects merchants and consumers, facilitating shopping and money transfers online and in person. Its offerings include Branded Checkout solutions like PayPal and Venmo (including Pay with Venmo and Pay Later), alongside unbranded alternatives (payment service provider, or PSP).

PayPal Holdings, Inc. (PYPL) Securities Lawsuit Class Period

February 25, 2025-February 2, 2026, inclusive.

All investors who purchased or otherwise acquired PayPal common stock (NASDAQ: PYPL securities) between February 25, 2025, to February 2, 2026, inclusive, during the class period may be eligible to join the PayPal Holdings, Inc. (PYPL) class action lawsuit.

Allegations in the PayPal Holdings, Inc. (PYPL) Securities Class Action Lawsuit

According to the complaint, PayPal Holdings, Inc., along with executives James Alexander Chriss, Jamie S. Miller, Frank Keller, and Diego Scotti, told investors they were executing a strategy that would deliver ambitious 2027 financial targets and renewed momentum in Branded Checkout. Investors allege defendants made materially false and misleading statements in these financial disclosures. They spoke in confident terms about transformation, growth, and strength. Investors allege those assurances lacked a critical truth: PayPal's salesforce and operations were not positioned to achieve what management was selling and failed to disclose material risks to branded checkout execution and 2027 guidance.

The story begins on February 25, 2025, when CEO James Alexander Chriss told investors at Analyst/Investor Day that, looking to 2027, PayPal saw high single-digit growth for transaction margin (transaction margin dollars) and had the ambition to deliver double-digit transaction margin growth "into the future" alongside "20% plus non-GAAP EPS growth." That same day, Executive Vice President Frank Keller outlined a plan to accelerate total payment volume growth to 8%-10% by 2027, measuring success by expanding the company's "new experience" share to over 80%, growing Pay Later usage by more than 20%, and increasing "Pay with Venmo" by more than 40% as key metrics for branded checkout growth.

As 2025 progressed, the optimism continued. On April 29, 2025, during the Q1 2025 earnings call, Chriss pointed to "strength" in execution, market "excitement" around new innovations, and engagement from consumers and merchants-adding, "we're just getting started." Months later, on October 28, 2025, during the Q3 2025 earnings call, he declared, "We are operating from a position of strength," and said the results were proof the strategy was working, claiming PayPal had built a "more balanced, profitable growth engine across branded experiences, PSP and Venmo."

Meanwhile, investors allege a different reality. The complaint states the 2027 targets were not achievable under Chriss's tenure and depended on an unrealistically stable consumer backdrop and flawless execution. Behind the scenes, PayPal was not equipped to deliver the growth management described and was "too optimistic" about how quickly staff could drive change and customer adoption across a massive user base, and execution was not in line with expectations set by management.

The Truth Emerges

The reckoning arrived on February 3, 2026, when PayPal released its Q4 2025 results and held an earnings call. The company reported disappointing earnings that missed consensus estimates by approximately $120 million in revenue and by 5.4% to 7.5% on adjusted earnings per share with worsening performance in Branded Checkout, announced a sudden CEO transition, and, regarding its previously touted 2027 financial targets (a withdrawal of forward-looking guidance), attributed the shortfall to "operational and deployment issues" across all regions. Interim CEO Jamie S. Miller acknowledged, "our execution has not been where it needs to be, particularly in branded checkout," and admitted, "we were too optimistic about how quickly we could drive change and customer adoption." She added that product deployment in the second half of the year was slower than planned.

These admissions cut directly against earlier assurances that PayPal was operating from a position of strength, executing its strategy, and on course for 2027 goals. The withdrawal of the 2027 outlook and the acknowledgement of execution failures contradicted prior guidance and related financial disclosures and undermined the sustained narrative of momentum and readiness presented throughout 2025.

Market Reaction

Investors and analysts reacted immediately. From a closing price of $52.33 per share on February 2, 2026, PayPal's stock (NASDAQ: PYPL) fell to $41.70 per share on February 3, 2026-a single-day decline of $10.63, or 20.31%, establishing a new 52-week low of approximately $42 and closing at $41.03 per share on February 4, 2026.

Next Steps

The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.
The Court will then consider motion for class certification.
The Court will later consider a Motion to Dismiss.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

Frequently Asked Questions

What is the PayPal Holdings securities class action lawsuit about?

The lawsuit alleges that PayPal Holdings, Inc. (NASDAQ: PYPL) and certain executives made materially false and misleading statements to investors between February 25, 2025, and February 2, 2026. According to the complaint, defendants provided overly optimistic projections about PayPal's Branded Checkout growth potential and 2027 financial targets while allegedly concealing that the company's salesforce was not adequately equipped to execute on these growth initiatives. The complaint claims defendants were "too optimistic" about how quickly they could drive customer adoption across their global user base.

What is the class period for the PayPal securities lawsuit?

The class period runs from February 25, 2025, to February 2, 2026, inclusive. Investors who purchased or otherwise acquired PayPal common stock during this timeframe may be eligible to participate in the class action. The lawsuit was filed on February 17, 2026, in the United States District Court for the Northern District of California under Case No. 26-cv-1381.

What allegedly caused PayPal's stock price to decline?

According to the complaint, on February 3, 2026, PayPal announced disappointing fourth quarter and fiscal year 2025 results, revealing:

Branded Checkout TPV grew only 1% in Q4, down from 5% in Q3
The company withdrew its 2027 financial targets
CEO Alex Chriss was abruptly terminated
Management admitted to "operational and deployment issues" across all regions

Following these disclosures, PayPal's stock allegedly dropped from $52.33 to $41.70 per share—a decline of approximately 20.31% in a single trading day.

Who are the defendants named in the PayPal class action complaint?

The complaint names PayPal Holdings, Inc. and four individual defendants:

James Alexander Chriss – Former President and CEO (terminated February 3, 2026)
Jamie S. Miller – Executive Vice President, CFO, and COO (appointed Interim CEO)
Diego Scotti – Executive Vice President and General Manager, Consumer Group
Frank Keller – Executive Vice President and General Manager, Large Enterprise & Merchant Platform Group

The lawsuit alleges the individual defendants possessed the power to control PayPal's public statements and had access to material non-public information.

What specific misrepresentations does the complaint allege PayPal made?

The complaint alleges defendants made misleading statements about PayPal's ability to accelerate Branded Checkout TPV growth to 8-10% by 2027 and achieve high single-digit transaction margin growth. According to the lawsuit, defendants repeatedly claimed they were "laser-focused" on execution and that their strategy was "working," while allegedly knowing that merchants required "much more hands-on integration support than anticipated" and that product deployment was "slower than planned."

What does the complaint allege about PayPal's operational issues?

According to the complaint, PayPal's February 3, 2026 disclosures revealed that the company had "operational and deployment issues that amplified the pressure" on Branded Checkout performance. The lawsuit alleges management admitted their delivery process assumed merchants would adopt at scale simply because of conversion benefits, when in reality, "merchants, especially the largest ones, have many competing priorities" and required significantly more integration support than anticipated.

What legal claims are asserted in the PayPal securities lawsuit?

The complaint asserts two counts under federal securities laws:

Count I: Violations of Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5 against all defendants for allegedly making materially false and misleading statements
Count II: Violations of Section 20(a) of the Exchange Act against the individual defendants as alleged "controlling persons" of PayPal

The lawsuit seeks damages for investors who purchased PayPal stock at allegedly artificially inflated prices during the class period.

What is the PayPal class action lawsuit about?

The lawsuit alleges PayPal and certain executives made misleading statements about the company's Branded Checkout growth potential and 2027 financial targets between February 25, 2025, and February 2, 2026. The complaint claims defendants concealed that PayPal was not equipped to execute on its growth initiatives.

When is the class period for the PayPal lawsuit?

The class period is February 25, 2025, through February 2, 2026. Investors who purchased PayPal (PYPL) common stock during this period may be eligible to participate in the class action filed in the Northern District of California.

What happened to PayPal's stock price?

According to the complaint, after PayPal disclosed disappointing Q4 2025 results and withdrew its 2027 targets on February 3, 2026, the stock dropped from $52.33 to $41.70 per share—approximately a 20.31% decline in one day. CEO Alex Chriss was also terminated.

Who are the defendants in the PayPal securities case?

The complaint names PayPal Holdings, Inc. and four executives: former CEO James Alexander Chriss, CFO/COO Jamie S. Miller, and Executive Vice Presidents Diego Scotti and Frank Keller. The lawsuit alleges these individuals controlled PayPal's public statements.

What legal violations does the complaint allege?

The complaint alleges violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act for allegedly making false statements, and Section 20(a) violations against individual defendants as alleged controlling persons of PayPal.

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Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

I have reviewed a complaint filed in the action.
I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.
I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.
My transaction(s) in PayPal Holdings, Inc. which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.
Within the last 3 years,
I have not sought to serve nor have I served as a class representative in any federal securities fraud case. I have sought to serve as a class representative in
I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

Are you US Citizen?

Yes. I certify under penalty of perjury that the foregoing is true and correct. Executed this No. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this

Clear

Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against PayPal Holdings, Inc. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

I have reviewed the complaint linked in paragraph 1