Chime Financial Inc (NASDAQ:CHYM) just vaulted to the sixth-largest debit card issuer in the U.S., all without a single physical branch.

JPMorgan analyst Tien‑tsin Huang initiated coverage on the stock with an Overweight rating and a $40 price target for December 2026. That’s about 28% upside from the current $31.32 level.

The Fintech That Cracked The Code

Chime didn't just stumble into scale – it engineered it. With 8.6 million members – mostly everyday Americans earning under $100K – it built trust through a "low cost, no cost" ethos.

More than two-thirds of members use Chime as their primary banking account. And because of convenient features like SpotMe overdraft protection, users saved over $2 billion in fees in 2024 alone, noted Huang.

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Spend First, Earn Later

Here's where the magic compounds: Huang highlighted that members swipe 50+ times per month, averaging $15K in annual spending – over four times what typical debit users spend. That non-discretionary spending means ~75% of Chime's revenue flows from merchant interchange fees, not high-risk lending.

Think of it as transactional gold, not loan gamble.

Scale, Engagement, Product Velocity

Chime's "spend-first, permission-to-lend" model delivers two things: engagement and expansion. With ChimeCore, its proprietary platform, it can scale new fintech features rapidly.

And now, by lowering barriers on its MyPay earned wage access, Huang said, the company is lowering user acquisition costs while boosting annual member revenue to around $442 – nearly double Chime's average ARPU.

Why $40 By 2026?

JPMorgan is applying a 9x multiple to projected 2027 transaction profits, a level that peers in fintech comfortably trade at. With 20%+ revenue CAGR and 10-point budget expansion in adjusted EBITDA margins, Chime looks like a bank – without the baggage.

Chime's mission isn't just marketing – it's a moat. It has cracked everyday banking for the underserved, built trust, and created a loyalty-driven revenue engine, says Huang.

And Wall Street is finally noticing: this non-bank could become one of the fintechs to watch.

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