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Investing.com - Piper Sandler has initiated coverage on Chime Financial (NASDAQ:CHYM) with an Overweight rating and a price target of $40.00, representing a significant upside from the current price of $31.32. According to InvestingPro analysis, the stock appears undervalued, with 8 additional key insights available to subscribers.
The research firm believes Chime is well-positioned to further penetrate a large addressable market of approximately 200 million Americans earning less than $100,000 annually.
Piper Sandler noted that while this customer segment might be considered "low quality" by traditional banking standards, Chime’s innovative fee-based servicing approach has created a "high upside" opportunity by democratizing credit and liquidity products for Americans who need them most.
The firm views Chime’s recently launched MyPay offering as a bellwether for future customer growth that should experience accelerated adoption in coming quarters.
Piper Sandler expects the MyPay service will ultimately produce much higher levels of profitability for Chime Financial.
In other recent news, Chime Financial raised $864 million in its initial public offering, pricing shares at $27 each, which was above the expected range. This IPO values the company at approximately $11.6 billion, marking a significant public debut for a U.S. fintech firm. Analysts have initiated coverage on Chime Financial with varying ratings. JPMorgan assigned an Overweight rating, citing Chime’s strong growth potential and projected 20% compounded revenue growth through 2027. UBS started coverage with a Neutral rating, highlighting Chime’s strategy of avoiding punitive fees and forecasting an 18% annual growth rate in transaction profit through 2028. Seaport Global Securities gave a Buy rating, projecting revenue growth in the high 20% to low 30% range over the next two years. These developments reflect Chime’s strategic positioning and potential for expansion in the digital financial services sector.
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