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Chime Financial (CHYM) has quietly staged a turnaround this month, with the stock climbing about 30% even as year to date performance remains weak. That disconnect is exactly what makes the setup interesting.
See our latest analysis for Chime Financial.
That recent 1 month share price return of just over 30% looks more like a sharp sentiment reset than a steady grind higher. This is especially the case with the share price still at $24.62 and the year to date share price return deeply negative, suggesting early momentum in a potential turnaround rather than a fully priced comeback.
If Chime’s rebound has you thinking about where else positive momentum and conviction might be building, this is a good moment to explore fast growing stocks with high insider ownership.
With shares still down sharply for the year but trading nearly 30% below the average analyst target, investors now face a key question: Is Chime undervalued after a messy reset, or is the market already pricing in its next leg of growth?
Chime Financial trades on a price to sales ratio of 4.5 times, putting the current valuation at a premium to both its industry and direct peers.
The price to sales ratio compares the company’s market value to its annual revenue. It is a common yardstick for high growth, loss making fintechs where earnings are not yet meaningful. In this case, investors are paying a higher revenue multiple than is typical for the US Diversified Financial industry and for similar companies.
CHYM’s 4.5 times price to sales ratio stands sharply above the broader industry average of 2.5 times and the peer group average of 3.5 times. This signals that the market is already assigning Chime a premium growth or quality profile. Yet this elevated tag closely matches the estimated fair price to sales ratio of 4.5 times, implying that while the shares look expensive relative to others, they are roughly in line with what the fair ratio suggests the market could gravitate toward if forecasts play out.
Explore the SWS fair ratio for Chime Financial
Result: Price-to-Sales of 4.5x (ABOUT RIGHT)
However, lingering losses and any slowdown in Chime’s double digit revenue growth could quickly undermine confidence in the current re rating story.
Find out about the key risks to this Chime Financial narrative.
If you see the story differently, or would rather dig into the numbers yourself and shape your own view, you can build a full narrative in just a few minutes, all starting with Do it your way.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Chime Financial.
Chime might be on your radar, but you will miss bigger opportunities if you do not act on other high potential themes our screeners uncover right now.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CHYM.
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