Chime Financial: First Internet-Native Juggernaut Focused On Consumer Banking, Says Bullish Analyst

While there are several large companies in the digital disruption and internet-native space, Chime Financial Inc. CHYM has emerged as the first juggernaut focused on consumer banking, according to Canaccord Genuity.

The Chime Financial Analyst: Analyst Joseph Vafi initiated coverage with a Buy rating and price target of $40.

The Chime Financial Thesis: According to a 2023 FDIC survey, approximately 15% of Americans are underbanked, a category in which over 34% of households earn more than $75,000, Vafi stated in the initiation note.

Check out other analyst stock ratings.

Although these households have healthy incomes, they are underbanked due to "costly and relatively punitive fee structures imparted by the traditional banking industry," he added.

Chime Financial's total addressable market (TAM) is much larger, "as its free checking account plus innovative products such as MyPay have expanded the value proposition well beyond the services provided by many other FinTechs while providing a first-class banking experience," the analyst wrote.

While its core consumer banking market is "ripe for disruption," Chime Financial is targeting new FinTech segments, including Earned Wage Access (EWA), which is "perhaps one of the last real greenfields left in consumer FinTech," Vafi further stated.

CHYM Price Action: Shares of Chime Financial had risen by 2.25% to $32.02 at the time of publication on Monday.

Read More: Meet Chime: Sixth-Largest Debit Card Issuer—And It’s Not Even A Bank

Photo: Shutterstock