Chime Financial, Inc. (CHYM) shares plummeted 6.03% in early trading on Thursday, following a wave of analyst price target cuts despite the company's improved revenue outlook. The digital banking service provider's stock faced significant pressure as multiple financial institutions reassessed their valuations.
The sharp decline came after several prominent analysts adjusted their price targets for Chime. UBS made the most substantial cut, lowering its target from $37 to $24, while maintaining a neutral rating. Piper Sandler reduced its target from $35 to $30, and JPMorgan, despite keeping an overweight rating, trimmed its target from $40 to $34. In contrast, Jefferies provided a small bright spot by raising its target from $17 to $19, though this increase was overshadowed by the broader downgrades.
The stock's tumble is particularly noteworthy given that Chime recently raised its full-year revenue forecast above Wall Street estimates, citing growing demand for its digital banking services. This disconnect between improved financial outlook and declining stock price suggests that while Chime's business is expanding, it may not be meeting the lofty growth expectations previously set by the market. Investors appear to be recalibrating their expectations for the fintech company in a challenging economic environment, leading to the significant sell-off observed in Thursday's trading session.
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