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PayPal Holdings Inc. hit the reset button once again, and its shares were tumbling in Thursday morning trading as some on Wall Street continued to express skepticism about the ease of the company’s turnaround.

Shares of PayPal
PYPL,
-11.34%
were off about 11% and on track for their largest one-day percentage loss since Aug. 3, 2023, when they lost 12.3%, according to Dow Jones Market Data.

Despite “bold efforts” by management in the middle of the quarter “to rejuvenate a story which many investors had abandoned,” PayPal’s latest results and outlook were “more likely to vindicate the perma-bears and leave the want-to-be-bulls in purgatory,” Wells Fargo analyst Andrew Bauch said.

Read: PayPal’s earnings outlook disappoints as CEO says he’s looking to rebuild trust

“We did not hear any compelling answers to [PayPal’s] existential question into the print,” Bauch wrote, with that question concerning what the company can do about competitive pressures facing its core checkout button. Analysts have recently flagged the growing threat from Apple Inc.’s
AAPL,
-0.63%
Apple Pay, for one.

“While we appreciate the energy [PayPal’s] new [management] team brings to the table, for those of us who have intimately documented the last two years, it’s no surprise that turning around the titanic that is [PayPal] will be no small feat,” Bauch continued, while keeping an equal-weight rating and $60 target price on the stock.

In the wake of the company’s late January innovation event, he “expected a clearer and more detailed plan around how [management’s] refreshed strategic priorities could translate to future reported results,” something he said “did not materialize this quarter.”

Jefferies analyst Trevor Williams explored whether the company’s latest report, which came with a downbeat outlook on earnings per share for the full year ahead, will prove a clearing event for the stock.

“On one hand, the outlooks for gross profit and EPS should provide a floor for [fiscal 2024] estimates, a prudent move,” he wrote. “On the other, there is risk in committing to invest heavily behind efforts to fix problems (namely, branded checkout market share) that we believe may be irreparable.”

Further, he said PayPal’s shift to including stock-based compensation in adjusted EPS “likely lowers the ceiling for the stock in the near term,” highlighting a “rich valuation relative to growth.”

He has a hold rating and $65 target price on the stock.

Don’t miss: PayPal’s latest layoffs could prove fodder for the stock’s bulls and bears alike

Some analysts commended the new executive team’s vision, though with questions about how long it will take to play out.

“[W]e are encouraged by the change in tone and leadership changes made by newly appointed CEO Alex Chriss,” Piper Sandler analyst Kevin Barker wrote. “He has instituted a series of changes to directly address [PayPal’s] challenged areas that ultimately could lead to sustained revenue and margin growth.”

But Chriss’s efforts “will take time and tangible progress could take many quarters to develop,” added Barker, who rates the stock at neutral and cut his price target to $62 from $66.

Susquehanna’s James Friedman said he and his team “applaud” the company’s new management team “for increasing the focus on transaction dollars, which ultimately should lift both the margin and the stock price.”

However, he also flagged PayPal’s “decision to focus on enhancements to Core PayPal, which many investors believe is their weaker hand when compared to [online-payments company] Braintree.” That decision is “less conventional,” in his mind.

“If they’re correct, the upside may be material,” Friedman continued. “But it’s far too soon to tell, and for now, we are trimming estimates on what appears to be no earnings growth in [fiscal 2024] on the same challenge of adverse leverage from business mix.”

He has a neutral rating and a $65 target price on the stock.

Barclays analyst Ramsey El-Assal flagged that PayPal was hitting “reset,” as reflected by the outlook.

“Despite near-term pain, we believe the approach is the right one,” he wrote. “We expect shares to pull back [Thursday], but with a clearer, cleaner setup then emerging.”

El-Assal rates the stock at overweight with an $81 target price.

Mizuho’s Dan Dolev was less convinced Wednesday’s outlook served as a clearing event, even as he floated the possibility of upside potential to the guidance.

“Regrettably, however, skeptics — like ourselves — are likely to dominate the stock today given issues like slowing branded & unbranded [volume] growth and [a] lackluster transaction-margin-dollar guide” that was “well below” his estimates, he wrote.

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