Chime Financial (CHYM +1.95%), a provider of mobile banking services, went public at $27 on June 12, 2025. Its stock opened at $43 on the first day, but it now trades at about $26.
Chime's stock dipped back below its IPO price as investors fretted over its slowing growth. Yet with a market cap of $8.7 billion, it doesn't seem expensive at three times next year's sales. For reference, Chime's valuation peaked at $25 billion following its final funding round in 2021.
Could this out-of-favor fintech stock bounce back and generate millionaire-making gains over the next decade? Let's review its business model, growth rates, and challenges to make a decision.
Image source: Getty Images.
How does Chime make money?
Chime's online platform offers fee-free checking and savings accounts with overdraft protection, early pay features, and other online banking services. It also provides a Visa (V 0.32%) debit card with fee-free access to over 50,000 ATMs, as well as an entry-level Visa credit card.
Chime is an appealing platform for lower-income users who don't have enough assets to open higher-value, fee-free accounts at conventional banks. Its early pay tools are helpful for people who live paycheck to paycheck, while its credit cards help them build their credit scores.
Yet Chime isn't a bank. Its two FDIC-insured banking partners -- The Bancorp (TBBK +1.00%) Bank and Stride Bank -- actually hold and manage all of those accounts. Chime generates most of its revenue by taking a cut of the "swipe fees" that Visa charges merchants to process debit and credit card transactions. A smaller percentage of its revenue comes from the incentives paid by its banking partners for bringing in new accounts.
NASDAQ: CHYM
Key Data Points
How fast is Chime growing?
In 2023 and 2024, Chime added new active members, increased total purchase volume, and grew average revenue per active member (ARPAM). That's why its stock initially soared.
|
Metric |
2023 |
2024 |
Q1 2025 |
Q2 2025 |
Q3 2025 |
|---|---|---|---|---|---|
|
Active Members |
6.6 million |
8.0 million |
8.6 million |
8.7 million |
9.1 million |
|
Growth (YOY) |
25% |
21% |
23% |
23% |
21% |
|
Purchase Volume |
$92.4 billion |
$115.2 billion |
$34.5 billion |
$32.4 billion |
$32.3 billion |
|
Growth (YOY) |
29% |
25% |
18% |
18% |
15% |
|
ARPAM |
$212 |
$245 |
$251 |
$245 |
$245 |
|
Growth (YOY) |
1% |
16% |
9% |
12% |
6% |
|
Revenue |
$1.28 billion |
$1.67 billion |
$519 million |
$528 million |
$544 million |
|
Growth (YOY) |
27% |
31% |
32% |
37% |
29% |
Data source: Chime Financial. YOY = Year-over-year.
However, its purchase volume declined sequentially in the second and third quarters of 2025. Its ARPAM also declined sequentially in the second quarter and stayed flat in the third quarter. It offset that pressure by attracting more active members to grow total revenue, but many of its investors scrambled for the exits, and its stock stumbled below its IPO price.
Chime claims the slowdown was seasonal, since tax refunds usually prompt its members to ramp up spending in the first quarter of each year. That was certainly true in 2024, when its purchase volume and ARPAM both declined sequentially in the second quarter.
Yet in the third quarter of 2024, its purchase volume flatlined sequentially as its ARPAM grew again. In the third quarter of 2025, its purchase volume fell sequentially as its ARPAM flatlined.
That key difference suggests that Chime's slowdown isn't entirely seasonal. Its members might be struggling in this challenging macro environment, and it still faces intense competition from neobanks like SoFi (SOFI +1.27%) and online banks like Capital One (COF +1.89%) 360.
Could Chime generate millionaire-making gains?
For 2025, analysts expect Chime's revenue to rise 30% as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn positive. From 2025 to 2027, they expect the company's revenue and adjusted EBITDA to grow at a CAGR of 20% and 119%, respectively.
To achieve that growth, Chime is expanding its lineup of higher-margin financial products -- including MyPay and Instant Loans -- to reduce its dependence on Visa's swipe fee revenues. It's also migrating its savings and debit accounts to ChimeCore, its own first-party payment processing platform, to cut costs and reduce its reliance on third-party payment processors.
Over the next few years, Chime will likely roll out additional investment, retirement, and wealth-planning features to reach a broader range of higher-income customers. It should continue ramping up its artificial intelligence (AI) investments to enhance predictive analytics, personalized financial guidance, fraud detection, and customer support tools. Those upgrades could increase the stickiness of its ecosystem, widen its moat, and reduce its operating costs.
If Chime matches Wall Street's estimates through 2027, continues to grow its revenue at a 15% CAGR over the following eight years, and trades at a more generous 5x sales, its market cap could rise fivefold to $47.5 billion.
That could easily beat the S&P 500, which has generated an average annual return of 10% since its inception, but it probably won't be considered a millionaire-making gain for most investors. However, it could still be a solid long-term play on the expanding fintech market.
