$PayPal(PYPL.US)$ shares fell 24% after the online payments company issued lackluster guidance for the year and said rising inflation's effect on consumers will hit transaction volumes.

PayPal issued a revenue-growth forecast below last year's and said it expected to earn between $4.60 and $4.75 per share under its preferred profit measure in the fiscal year 2022, below analyst expectations of $5.21, according to FactSet.

In a call with analysts, John Rainey, the company's chief financial officer, said that the Omicron variant of Covid-19, inflationary pressures and lack of additional government stimulus packages have weighed on spending and PayPal's business. He noted that the impact has been greatest on lower-income customers and has continued into the first quarter.

"The persistence of inflationary effects on personal consumption, labor shortages, supply chain issues and weaker consumer sentiment have led us to adopt a more cautious outlook," Mr. Rainey told analysts.

If sustained, the 17% drop would be PayPal's biggest single-day fall since it was listed in its current form in 2015, according to FactSet. PayPal shares fell 15.8% on March 16, 2020, during the height of the pandemic selloff.

It is the second quarter in a row that PayPal has disappointed investors. In November, shares fell 10% after it reduced its forecast for online payment volumes and revenue.

Jefferies analyst Trevor Williams wrote in a note that the company's outlook for the next fiscal year "lacks anything redeeming."

Shares in the payments company soared during the pandemic as commerce turned online, sending PayPal's valuation higher than all U.S. banks except JPMorgan Chase & Co.

The share price peaked in July 2021 and then tumbled later in the year after news leaked that the company was in talks to buy social-media platform $Pinterest(PINS.US)$. The company abandoned its Pinterest pursuit under shareholder pressure.