PayPal, owner of Venmo, is one of the worst stocks of 2022

PayPal (PYPL) warned back in February that Sales and new active user growth will be below expectations. Chief Financial Officer John Rainey said the combination of inflationary pressures, supply chain issues and the lack of any new stimulus from the federal government is hurting consumer confidence and spending.

Making matters worse for PayPal is the fact that Rainey plans to leave the company soon after seven years there. The technology company surprised Wall Street earlier this month when it announced that Rainey would become the new chief financial officer of Walmart (WMT) He will leave PayPal at the end of May.

The company is looking for a permanent replacement. But until one is found, Gabriel Rabinovich, PayPal’s senior vice president of corporate finance and investor relations, will be interim chief financial officer.

“Paypal is in a critical state of purgatory with the departure of John Rainey,” said Andrew Bausch, chief analyst at SMBC Nico Securities America.

Investors are also concerned that the company may need to lower its forecast again.

“This looks like a situation where the current administration may need to reset guidance even further in order to lower the bottom line when a new CFO comes in,” said Jordan Kahn, chief investment officer at ACM Funds.

Khan said his company sold PayPal shares in January ahead of its latest earnings report due to concerns about growth. But he still liked the long-term outlook for the stock and said he was waiting for the right moment to get back into the market.

Another concern? Consumers are beginning to return to brick-and-mortar retailers to shop as fears about Covid fade thanks to vaccines and less-lethal – albeit more transmissible – variants of the virus.

This means consumers may look to make more purchases with credit and debit cards or cash in physical stores and make fewer digital payments to shop online, said Christopher Vecchio, chief strategist at DailyFX.

With the growing competition in digital payment, should PayPal cut a deal?

However, PayPal could benefit, if Block CEO Jack Dorsey looks to become more involved with Twitter in the wake of the Elon Musk acquisition. Dorsey used to be the CEO of both companies and some believe the distracted Dorsey has been beneficial to PayPal.

“If Dorsey becomes a part-time CEO and returns to Twitter, it could help PayPal and open the door for them to make money,” Vecchio said.

Kahn agreed that Dorsey focusing more on Twitter would be “great for PayPal” but thinks that’s unlikely to happen. Which means PayPal will have to work even harder to stimulate user growth.

The question is whether PayPal’s investors, who have firmly placed the stock in the Wall Street Sanctions Fund, will agree to it.

But Kahn said the good news is that after the market downturn this year, most fintech companies are in the same boat as PayPal. That means it’s much cheaper – and potentially buy-able.