The shares of PayPalThey were lower by more than 19% Wednesday in premarket trading, just a day following the announcement of the company provided weak guidanceIt was partly due to inflation.

PayPal’s fourth quarter results were mixed. Earnings per share estimates fell to $1.11 (ex-items) compared with $1.12 anticipated. However, the company beat expectations on revenues, with revenue of $6.92 billion, rather than $6.87 billion as expected according to Refinitiv.

It also stated that first quarter non GAAP earnings per share will be at 87 cents. Analysts were expecting $1.16. It also anticipated that revenue would grow about 15% to 17% for the full year 2022, on a spot and foreign-currency-neutral basis. For 2022, analysts expected revenue to grow by 17.9% year over year.

CNBC interviewed Dan Schulman, CEO of PayPal, about how the company takes a “measured approach to guidance” but anticipates that revenue will accelerate in the second-half.

He cited the challenges, including that of transitioning from the former owner eBayto its payments platform as well as “exogenous factors”, such inflation, which can bring down consumer spending. Supply chain issues and problems that “disproportionately affect” cross-border payment.

PayPal missed its user growth targets partly due to “illegitimate accounts” of 4.5million that were created on the platform. “This affected our ability to meet our guidance in quarter,” John Rainey, PayPal’s CFO said. Rainey also stated that PayPal had lowered its user growth goals. This was due to the fact that it wanted to “sustainable growth” and drive engagement.

Analysts at Canaccord Genuity Capital Markets gave the stock a buy rating, however, they lowered their price target by $215 to $215. On Tuesday, they wrote that PayPal’s current challenges were mainly caused by “short term headwinds.”

The Canaccord note stated that while net account growth is likely to slow in 2022 we have seen a steady rise in engagement metrics. It also said that they expect more marketing to drive engagement in 2022. PYPL is already showing that its ability to exploit rapidly emerging opportunities despite being large has been demonstrated by scaling an outstanding Buy Now Pay Later offering (BNPL) and launching of equity trading.

The analyst expressed optimism regarding the earlier announced Venmo partnershipWith AmazonThey believe that this “could prove to be the biggest single catalyst for PYPL 2022.”

BTIG analysts downgraded PayPal stock to neutral, and they removed their $270 price goal. The analysts referred to new areas of uncertainty, including the shift in company’s approach towards customer acquisition and engagement. Analysts also noted that executives claimed the full-year forecast for inflation and supply chains issues was too cautious. These claims were in sharp contrast to recent optimistic outlooks from the card networks.

This report was written by Kate Rooney from CNBC.

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