By Niket Nishant

(Reuters) – Shares of PayPal Holdings fell nearly 11% on Thursday as weak second-quarter margins at the digital payments firm overshadowed a strong forecast.

The stock was trading at $65.29, its lowest since mid-June.

The company said higher provisions at its credit portfolio hit margins and that it had tightened underwriting standards on loans.

The San Jose, California-based company reported second-quarter adjusted operating margins of 21.4% after markets closed on Wednesday. Those were at 22.7% in the first quarter.

Profit margins at PayPal have come under scrutiny in recent months. While its low-margin businesses like Braintree have shown strong growth, higher-margin business like the PayPal-branded checkout platform have shown slower growth.

“This was another disappointing earnings report from PayPal,” Edward Jones analyst Logan Purk said. “This will fuel investor’s bearish outlook that PayPal’s focus on its largest customers will result in lower overall profitability.”

The company is also looking for a new CEO to succeed Dan Schulman, who will retire at the end of the year.

“We are in the very final stages of the process with several outstanding candidates,” Schulman said on Wednesday.

J.P.Morgan analyst Tien-tsin Huang said they expect the stock to remain “range-bound” until a leadership change is made and strategic efforts begin to bear fruit, “which we don’t expect for a few quarters.”

PayPal expects adjusted profit per share for the current quarter to be in a range of $1.22 and $1.24, while analysts expect a profit of $1.22 per share.