Chime Financial had a strong IPO debut with improving earnings and growth potential

From Nasdaq: 2025-06-23 00:05:00

Fintech company Chime Financial (NASDAQ: CHYM) had a strong IPO debut, surging 40% above its $27 price to open at $43. Currently trading below $35, Chime is a neobank offering low-cost services with no fees, early direct deposit access, and popular features like “MyPay” and “SpotMe.” Chime targets an underserved demographic, with room for growth.

Chime’s revenue mostly comes from interchange fees, partnering with banks for back-end services to minimize credit risk. Revenue grew over 30% in 2024, with Q1 2025 showing a 32% surge. The company turned profitable in Q1 2025, indicating marketing investments are paying off. Chime faces commoditization in the neobanking space and competition from traditional banks.

With a market cap of $12 billion, Chime trades at about 7x trailing revenues, may seem pricey. Reliance on transaction fees poses risks in an economic slowdown. Investing in a single stock like CHYM carries risks, but diversified portfolios like the Trefis High Quality (HQ) Portfolio have outperformed the S&P 500 with lower risk over the past four years.



Read more at Nasdaq: Strong Growth, Improving Earnings Make Chime Stock A Buy?