Chime Financial: Analysts Ring In—And It’s a Buy

Key Points

• Chime Financial's analysts have chimed in, rating this stock a Buy and predicting it will advance from the post-IPO lows.
• This company is expected to grow at a hyper pace for several years, widening its margin along the way.
• There is a risk of dilution, but it is minimal in 2025. 

Chime Financial’s NASDAQ: CHYM impressive IPO and subsequent pullback present a buying opportunity for investors. The opportunity is now highlighted by the initial analysts' forecasts, which amount to a solid Buy rating.

MarketBeat.com tracked more than a dozen reports in the first wave of coverage, with roughly 70% of them indicating a Buy equivalent or better, providing a bullish bias to the outlook. 

The bullish bias is compounded by the price target range, which runs from $33 to $40, and the range of analysts covering the stock, which reads like a who’s who of major financial institutions.

The $33 low-end is critical because it implies the post-IPO sell-off was overdone, and a value is present in early July. The consensus of $37.45 is also critical, as it is well above the midpoint of the range, leading the market into the high-end range. 

What is Chime Financial? It is a cloud-native, mobile-first fintech platform offering no-fee banking and checking services. It aims to revolutionize and democratize consumer banking, providing easy-to-use, no-fee services, including traditional deposit accounts and credit-building tools.

The company generates revenue via fees associated with its branded cards and is making money today. The platform leverages partnerships with national banks and is geared to scale. Regarding geopolitical and trade-related issues, its U.S.-only business model well insulated it from these issues. 

Chime Financial’s Robust Outlook Supports Today’s High Value

Chime Financial is not a cheap stock, trading at roughly 150 times its 2025 earnings outlook. However, the critical takeaways are that it will achieve an adjusted profit in 2025, and the forecasts for top and bottom-line growth are robust. Analysts forecast revenue growth in the 20% range for this fiscal year and next, with acceleration as growth efforts and brand recognition gain traction. Top-line growth is predicted to accelerate to over 50% by the decade’s end, and the earnings forecasts are more robust. 

Chime Financial is forecast to widen its margin substantially as revenue grows. Earnings are predicted to advance more than 160% in 2026 and then sustain a high-double-digit CAGR near 90% through 2030. That puts the valuation closer to 12x, suggesting a substantial upside is possible for this cash-flow generating machine. 

There is a risk of dilution, but it is currently minimal. The company raised more than $850 million with its IPO, exceeding the expected range, and is well-capitalized. At worst, investors may expect to see share-based compensation increase the floating count incrementally over time. The offset is that profitability and robust cash flow suggest capital return, including share buybacks, are also in this company’s future. 

Chime Financial Is Set to Rebound, Could Exceed Analysts' High Target

Chime Financial’s stock isn’t all that bullish at first glance, with the initial movement a 35% contraction from the opening day high to the low on June 23. However, the takeaway is very bullish because the initial trade was 60% above the IPO target price, the first day’s close was still 37% above the IPO target price, and the low on June 23 is still above the IPO target price.

This shows that the market is eager to buy, and the price action since late June affirms it. The market appears to have found a bottom above the critical $27 target level, with potential to move higher, as highlighted by analysts. 

The critical resistance point is the low end of the analyst's target range. It could cap gains in the near term, but given the outlook and sentiment, it is unlikely to do so. The more likely scenario is that this market will move into the analysts’ range before the end of July and then quickly advance toward the consensus target, with potential price hiccups in the $35 to $36 range.