Tien Tsin Huang, an analyst from J.P. Morgan, has initiated a new Buy rating on Chime Financial, Inc. Class A (CHYM).
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Tien Tsin Huang’s rating is based on Chime Financial’s innovative approach to scaling financial services as a non-bank entity. The company has successfully gained the trust of many Americans by offering a low-cost banking model that eliminates fees and minimum balance requirements, which have traditionally been burdensome. Chime’s impressive growth is evident as it holds the largest direct deposit base among U.S. fintech companies and ranks as the sixth largest debit card issuer, with significant purchase volume and member growth expected in the coming years.
Chime’s asset-light and spend-centric revenue model allows it to offer low-fee liquidity and lending products, fostering customer loyalty and attracting new users. This approach supports a forecast of 20% compounded revenue growth and significant EBITDA margin expansion through 2027. Additionally, Chime’s mission to provide financial progress to everyday people, combined with its high user engagement and spend-first model, positions it well for future growth. The company’s strategic initiatives, such as the rollout of new products and the ChimeCore platform, further enhance its potential, despite the higher credit risk associated with its expanding lending product mix.
According to TipRanks, Tsin Huang is a 5-star analyst with an average return of 6.9% and a 59.27% success rate. Tsin Huang covers the Technology sector, focusing on stocks such as Accenture, Cognizant, and Fiserv.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $39.00 price target.