CHYM · Chime Financial
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $26.84
Note written ·
In the portfolio Since : +2.1% from the average price paid for its shares, 2.4 percentage points ahead of the S&P 500 from the minute it was bought. See the portfolio.
Why it was bought
Bought 12 November 2026 on results. The fact behind it, dated 4 November 2026: Q3 2026 results: revenue rose 32% to $718.0 million (27% in Q2), adjusted EBITDA was $137.3 million at a 19% margin, and full-year guidance was raised a third time to $2.792–2.802 billion of revenue and $519–524 million of adjusted EBITDA.
Price against the kill line
25.0% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $26.84, on record since 10 November 2026. The shares are up 6.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $26.84, the low close of 1 October 2026, which would erase the recovery around the third-quarter beat. Fourth-quarter 2026 revenue under the $757 million low end of guidance, or termination of the Stride Bank agreement, would also show the case failing.
The portfolio's case
Chime's revenue growth re-accelerated to 32% in Q3 2026 ($718.0 million; Q2: 27%) as platform revenue rose 52%, transaction margin reached 74% and adjusted EBITDA margin 19% from 5%. Incremental EBITDA margins above 60% and more than $100 million of expected Stride Bank synergies are not yet in a 2027 guide.
The portfolio sells if one of these comes true
- Q4 2026 revenue below the $757 million low end of guidance, or 2027 revenue guidance implying growth below 20% (Q3 2026: 32%).
- Active member growth below 15% year over year (Q3 2026: 20%, 10.9M members), or MyPay loss rate above the 0.9–1.2% band (Q3 2026: 1.1%).
- Termination of the Stride Bank / Central Service Corporation acquisition, or OCC and Federal Reserve approval not obtained by the end of the first half of 2027.
It can also sell when that day's research finds the stock fully priced, for a clearly better use of the money, to limit risk in the portfolio, on the weekly review's plan, when a cash takeover pays the shares out or at the end set for a shorter trade when it was bought. A close through the kill line (on a weekly line, a weekly close) means the note's call is wrong: the note is re-read, and the portfolio reads the new note at its next decision. The price alone never sells.
Catalyst
The business · as of
Chime sells fee-free bank accounts, debit cards, pay advances (MyPay) and small loans to US consumers through partner banks. It earns mostly interchange fees when members spend on their cards, plus lending and other fees. Revenue was $718 million in the quarter to 30 September 2026.
What is changing, and what follows · as of
- What is changing now
- On 4 November 2026 Chime reported third-quarter 2026 revenue of $718.0 million, up 32% from a year earlier, and raised its full-year outlook to $2.792–2.802 billion. On 13 November 2026 S&P Dow Jones Indices added it to the S&P MidCap 400, effective 18 November 2026.
- What follows for the company
- Operating margin rose to 4.8% in the quarter to 30 September 2026 from −11.9% a year earlier. Free cash flow reached $418 million over four quarters, leaving net cash of $1,083 million against the $590 million Stride Bank price.
- What follows for its customers, suppliers and competitors
- Visa (V) carries the 19% rise in purchase volume. Partner bank The Bancorp (TBBK) faces a larger in-house Chime bank if the Stride deal closes. SoFi (SOFI), Block (XYZ) and Dave (DAVE) compete for the same members.
What the price assumes · as of
At the 13 November 2026 close (filed figures to 5 November 2026) the shares trade at 167.3 times earnings, 4.7 times sales and 256.9 times operating earnings, with a 3.1% free-cash-flow yield. Those multiples hold only if revenue keeps growing near the 32% of the quarter to 30 September 2026 while the 4.8% operating margin widens several times over.
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 718
- Revenue, change on a year (%)
- +32.1
- Gross margin (%)
- 90.0
- Operating margin (%)
- 4.8
- Free cash flow, four quarters ($M)
- 418
- Net cash, cash less debt ($M)
- 1,083
- Price to earnings (×)
- 167.3
- Enterprise value to sales (×)
- 4.7
All filed numbers
What Chime Financial reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 718 | +32.1 | 90.0 | 4.8 |
| first filed | 670 | +26.8 | 88.8 | 3.2 |
| first filed | 647 | +24.8 | 89.6 | 7.1 |
| first filed | 596 | +25.5 | 88.9 | −9.0 |
| first filed | 544 | +28.8 | 87.2 | −11.9 |
| first filed | 528 | +37.5 | 87.3 | −176.2 |
| Pre-tax income ($M) | 44.0 |
| Net income ($M) four quarters: 80.3 | 43.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +7.6 |
| Operating cash flow ($M) | 454 |
| Capital spending ($M) | 35.5 |
| Free cash flow ($M) | 418 |
| Cash and short-term investments ($M) | 1,183 |
| Debt ($M) credit line | 100 |
| Net cash, cash less debt ($M) | 1,083 |
| Deferred revenue ($M) +16.6% on a year | 5.4 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 320 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 1,542 |
| Market value ($M) | 13,424 |
| Enterprise value, market value plus net debt ($M) | 12,341 |
| Enterprise value to sales (×) | 4.7 |
| Enterprise value to operating income (×) | 256.9 |
| Price to earnings (×) | 167.3 |
| Price to book value (×) | 8.7 |
| Free-cash-flow yield (%) | 3.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 6.3% of shares outstanding sold short, 5.8 days of average trading to cover, −2.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $510.1M |
| 12 monthsfrom | $0 | $681.8M |
Linked companies · as of
- Suppliers:
- V, TBBK
The thesis
Chime Financial is modestly more likely than not to beat the S&P 500 over the next three months. Revenue growth sped up to 32% in the third quarter of 2026, the company raised its full-year outlook for the third time, and the shares now join the S&P MidCap 400. The fourth-quarter 2026 report, measured against Chime's $757–767 million revenue forecast, settles the case. The regulators' decision on the Stride Bank purchase is the second test.
The rating is Medium because the business evidence is strong and dated, while selling by large holders still weighs on the shares. DST Global, a 10%-plus owner, sold 1,329,767 shares at an average of $31.14 on 5 November 2026 and 6 November 2026, according to a Form 4 filed 9 November 2026. The shares still closed higher in each of the next four sessions, reaching $33.55 on 13 November 2026.
S&P Dow Jones Indices announced on 13 November 2026 that Chime will replace NorthWestern Energy Group in the S&P MidCap 400 before trading opens on 18 November 2026. NorthWestern is leaving because of its acquisition by Black Hills. A common market view is that index additions draw buying from index-tracking funds up to the effective date and can give part of it back afterwards. Investing.com reported that the shares rose 1.8% in after-hours trading on 13 November 2026, after the announcement.
The price still discounts the supply of stock. The 3-month change to 13 November 2026 is 6.7%, from a close of $31.45 on 17 August 2026, even though Chime raised its full-year revenue forecast on 8 September 2026 and again on 4 November 2026.
Bullish and bearish views on Chime Financial, Inc.
The bull case on Chime Financial, Inc. (CHYM), in brief: revenue growth sped up in the third quarter. The bear case: large holders keep selling.
Bull case
- Revenue growth sped up in the third quarter. Revenue rose 32% from a year earlier to $718.0 million in the quarter to 30 September 2026. Growth was 27% and 25% in the two quarters before, according to the 10-Q filed 5 November 2026.
- The outlook rose a third time. Full-year revenue guidance is now $2.792–2.802 billion, up from $2.76–2.77 billion on 8 September 2026 and $2.725–2.745 billion on 5 August 2026, Chime said on 4 November 2026. The fourth-quarter forecast is $757–767 million.
- Margins widen as revenue grows. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $137.3 million in the third quarter, a 19% margin, Chime reported on 4 November 2026. The company forecasts a 21–22% margin for the fourth quarter. The filed operating margin was 4.8%, against −11.9% a year earlier.
- The business now produces cash. Free cash flow was $418 million over the four quarters to 30 September 2026, and net cash was $1,083 million at that date, according to the 10-Q. That covers the $590 million cash price agreed in September 2026 for Stride Bank's parent.
- Members and spending per member both grew. Active members rose 20% to 10.9 million, average revenue per active member rose 10% to $270, and purchase volume rose 19% to $38.5 billion, according to the 4 November 2026 release.
- Analysts raised targets after the report. On 5 November 2026 Goldman Sachs raised its target to $43 from $38, Scotiabank to $44 from $42, JP Morgan to $40 from $35, Wells Fargo to $42 and B. Riley to $45 from $44. Freedom Capital Markets raised its target to $40 on 6 November 2026, Benzinga reported.
- Index inclusion widens the holder base. From 18 November 2026 the shares are an S&P MidCap 400 member in the Financials sector, according to the S&P Dow Jones Indices release of 13 November 2026.
Bear case
- Large holders keep selling. DST Global sold 3,216,189 shares at an average of $33.99 on 14 September 2026 and 1,329,767 at an average of $31.14 on 5 November 2026 and 6 November 2026, SEC Form 4 filings show. Co-founder Ryan A. King sold 50,300 shares from 9 October to 13 October 2026, 11,318 on 20 October 2026 and 63,382 on 5 November 2026, all under a Rule 10b5-1 trading plan.
- Guidance implies slower growth. The fourth-quarter forecast of $757–767 million equals 27–29% growth, Chief Executive Chris Britt repeated at the KBW Fintech Ecosystem Conference on 11 November 2026. That is below the 32% just reported.
- The multiples leave little room. At the 13 November 2026 close, the shares trade at 167.3 times filed earnings and 256.9 times operating earnings. Net income was $80 million over the four quarters to 30 September 2026.
- Lending widens credit exposure. MyPay, Chime's pay-advance product, originated $5.3 billion in the third quarter at a 1.1% loss rate, Britt said on 11 November 2026. He said a line of credit is launching soon and that an unsecured credit card is planned for 2027.
- Dilution continues. The diluted share count rose 7.6% from a year earlier in the quarter to 30 September 2026, according to the 10-Q filed 5 November 2026.
- The Stride deal needs two regulators. The purchase requires approval from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, and Chime expects it to close in the first half of 2027.
- The finance chief is still interim. Mark Troughton has been President and interim chief financial officer since 7 August 2026. The third-quarter release of 4 November 2026 named no permanent appointment.
Price setup
The shares closed at $33.55 on 13 November 2026. That is above the 50-day moving average of $29.93 and the 200-day moving average of $24.03, both from adjusted daily closes as of 13 November 2026. Closes rose from $31.33 on 6 November 2026 to $32.53 on 9 November 2026, $33.08 on 11 November 2026 and $33.55 on 13 November 2026, over the sessions in which DST Global's November sale was disclosed.
The 52-week high is $35.55, set intraday on 9 September 2026, and the last close is 5.6% below it. The 52-week closing low is $16.44 on 10 June 2026. DST Global's two disclosed sales sit in the upper part of the range: an average of $33.99 in September and $31.14 in November. A close above the $35.55 high would put the shares above every price at which DST Global sold this autumn. UBS's Neutral target of $34, raised from $31 on 5 November 2026, sits just above the last close.
The sessions around the 18 November 2026 index effective date are the first test of whether the buying holds once index funds have bought.
Catalysts ahead
- 18 November 2026: Chime joins the S&P MidCap 400 before the open, replacing NorthWestern Energy Group. Index funds must own the shares from this date; the closes after 18 November 2026 show whether the gain since the 4 November 2026 report holds once that buying is done.
- Through December 2026 (rolling): Form 4 filings from DST Global, directors and other large holders. These filings show whether large-holder selling keeps pace after DST Global's 1,329,767-share sale on 5 November 2026 and 6 November 2026, with the shares near $33.
- ~February 2027 (est.): Fourth-quarter 2026 results; date not yet announced. Revenue against the $757–767 million forecast tests the third guidance raise of 2026. The margin against the 21–22% forecast tests the operating-leverage case.
- First half of 2027 (est.): OCC and Federal Reserve decisions on the purchase of Stride Bank's parent, Central Service Corporation. Approval and closing decide whether Chime becomes a bank holding company and can earn the projected net synergies of more than $100 million a year.
What would change the view
A daily close below $26.84, the low close of 1 October 2026, which would erase the recovery around the third-quarter beat. Fourth-quarter 2026 revenue under the $757 million low end of guidance, or termination of the Stride Bank agreement, would also show the case failing.
The risks this note tracks, each with what would confirm it:
- Fourth-quarter revenue falls short of management's raised outlook, or the 2027 outlook implies a sharp slowdown. Confirmed by: reported fourth-quarter 2026 revenue below the $757 million low end of guidance, or 2027 revenue guidance implying growth below 20% (32% in the third quarter of 2026).
- Member growth slows or MyPay credit losses rise as lending grows. Confirmed by: active member growth below 15% from a year earlier (20% in the third quarter of 2026), or a MyPay loss rate above the 0.9–1.2% band (1.1% in the third quarter of 2026).
- Selling by insiders and large holders outweighs the improved results. Confirmed by: new Form 4 filings showing further DST Global or director sales while the shares fall back below the 50-day moving average.
- Buying tied to the S&P MidCap 400 addition fades after the effective date. Confirmed by: closes after 18 November 2026 that give back the gain since the 4 November 2026 report, with no new company news.
- The Stride acquisition does not complete. Confirmed by: a company filing ending the agreement, or OCC and Federal Reserve approval not obtained by the end of the first half of 2027.
- A Regulation II change removes the small-bank interchange exemption that Chime's revenue relies on. Confirmed by: a Federal Reserve proposal or rule narrowing the Durbin exemption for banks below $10 billion in assets.
What it trades with
Most of Chime's revenue comes from debit interchange, the fee earned when members use their cards, routed through partner banks. The shares therefore respond to consumer card spending and to news on Regulation II, the Federal Reserve rule that caps those fees for banks with $10 billion or more in assets. Purchase volume, $38.5 billion in the third quarter of 2026, links results to the consumer cycle.
From 18 November 2026 the shares sit in the S&P MidCap 400, so flows into and out of mid-cap index funds also move them. Since September 2026, Form 4 sales by large holders have moved the shares more than sector news. If the Stride purchase closes, Chime becomes a bank holding company, and its results will also depend on deposit funding costs.
Caveats
- Mark Troughton has been President and interim chief financial officer since 7 August 2026; the third-quarter 2026 results release named no permanent chief financial officer. Chime third-quarter 2026 results release (SEC 8-K exhibit 99.1) · as of
- DST Global entities own more than 10% of the shares, so their sales must be reported on Form 4 within two business days. SEC Form 4 filed 9 November 2026 · as of
- Co-founder Ryan A. King sells under a Rule 10b5-1 plan, so further sales on a preset schedule are likely to appear in Form 4 filings. SEC Form 4 filed 6 November 2026 · as of
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $718.0 million, up 32% from a year earlier; GAAP net income was $43.7 million; adjusted EBITDA was $137.3 million at a 19% margin. Chime third-quarter 2026 results release (SEC 8-K exhibit 99.1) · as of
- Active members were 10.9 million, up 20%; average revenue per active member was $270, up 10%; purchase volume was $38.5 billion, up 19%. Chime third-quarter 2026 results release (SEC 8-K exhibit 99.1) · as of
- Chime forecast fourth-quarter 2026 revenue of $757–767 million and adjusted EBITDA of $161–166 million, and full-year revenue of $2.792–2.802 billion. Chime third-quarter 2026 results release (SEC 8-K exhibit 99.1) · as of
- CEO Chris Britt repeated fourth-quarter guidance of 27–29% growth and a 21–22% adjusted EBITDA margin, and cited a 1.1% MyPay loss rate on $5.3 billion of third-quarter originations. KBW Fintech Ecosystem Conference transcript, Investing.com · as of
- DST Global Advisors, a 10% owner, sold 1,329,767 shares at an average of $31.14 on 5 November 2026 and 6 November 2026. SEC Form 4 filed 9 November 2026 · as of
- Goldman Sachs raised its target to $43 from $38, Scotiabank to $44 from $42, JP Morgan to $40 from $35, B. Riley to $45 from $44, and UBS to $34 from $31 with a Neutral rating. MarketBeat, Benzinga and TradingView analyst reports · as of
- S&P Dow Jones Indices announced that Chime Financial will replace NorthWestern Energy Group in the S&P MidCap 400 before the open on 18 November 2026. S&P Dow Jones Indices press release · as of
- The $590 million cash purchase of Stride Bank's parent requires OCC and Federal Reserve approval and is expected to close in the first half of 2027. Chime third-quarter 2026 10-Q and September 2026 deal announcement · as of
Sources
- Chime Financial, Inc. - Form 8-K - FY2026 · sec.gov ·
- Chime Financial Set to Join S&P MidCap 400 · press.spglobal.com ·
- Chime Financial stock rises after S&P MidCap 400 inclusion announcement · sg.finance.yahoo.com
- Chime at KBW fintech ecosystem conference: growth and margins rise · investing.com ·
- Chime Financial (NASDAQ:CHYM) Major Shareholder Sells $41,061,310.51 in Stock · marketbeat.com ·
- Chime Financial (NASDAQ:CHYM) Given New $43.00 Price Target at The Goldman Sachs Group · marketbeat.com ·
- UBS maintains Chime Financial at Neutral, raises price target to $34 from $31 · tradingview.com
- Chime to acquire Stride Bank for $590m · fintech.global ·
Related · shared themes
GPN
Global Payments
Global Payments trades on a reported $40 billion CD&R and GTCR buyout, and nine brokers raised targets after in-line third-quarter results…
EFX
Equifax
Equifax shares are more likely to lag the S&P 500 over the next three months: the October rebound already prices in 8% non-mortgage growth…
FOUR
Shift4 Payments
Shift4 Payments' growth recovery stalled on 5 November 2026 (organic growth 9%, guidance cut again), so the shares are more likely to lag…
INTR
Inter
Inter & Co.'s shares are more likely to lag the S&P 500 over three months: profit grew 26% in the 12 November 2026 report, but late overdue…
See also · stocks to watch