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Investing.com - William Blair initiated coverage on Chime Financial (NASDAQ:CHYM) with an Outperform rating on Monday. The stock, currently trading at $31.32, has experienced significant volatility recently, with InvestingPro data showing a 9.24% decline in the past week.
The research firm cited Chime as a "chief beneficiary of a structural banking industry shift toward consumer-friendly digital providers" in its analysis of the financial technology company.
William Blair highlighted traditional banks’ shortcomings in serving consumers, pointing to credit cards with low minimum payments and high fees, minimal interest on savings accounts, and lagging product innovation compared to digital alternatives.
The firm noted that Chime has positioned itself as a "lower-cost, higher-touch digital alternative" in the banking sector, particularly appealing to younger consumers who demand more innovative financial products.
William Blair expressed bullishness on Chime’s focus on primary banking relationships and its "radical cost-to-serve advantage," which the firm believes will drive "durable spend-driven income, strong operating leverage, and compelling unit economics."
In other recent news, Chime Financial has received various ratings from prominent financial firms. Goldman Sachs initiated coverage with a Neutral rating, citing Chime’s strong fundamentals but expressing concern over its current lack of profitability. Morgan Stanley (NYSE:MS), on the other hand, gave Chime an Overweight rating, highlighting its success in acquiring primary account status and its potential for rapid revenue growth. Similarly, Piper Sandler also rated Chime as Overweight, emphasizing the company’s innovative fee-based approach and the potential of its MyPay service to drive future profitability.
JPMorgan joined the chorus with an Overweight rating, noting Chime’s significant growth in direct deposits and its status as a major debit card issuer. The firm projects a 20% compounded revenue growth for Chime through 2027. Meanwhile, UBS provided a Neutral rating, acknowledging Chime’s strategy of avoiding punitive fees and its potential for increased scale and profitability. UBS forecasts an 18% compound annual growth rate in transaction profit through 2028. These developments reflect a mix of optimism and caution among analysts regarding Chime Financial’s growth prospects.
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