Chime Financial Inc (NASDAQ:CHYM) stock rose 4.37% (As on July 4, 4:36:02 PM UTC-4, Source: Google Finance) after Compass Point initiated coverage of the company with a Neutral rating and $33 price target, citing undervaluation of the company’s Cash App business and an expected acceleration in growth during the second half of 2025. The firm believes Chime’s ability to grow members at roughly 20% and revenue at 30% will likely continue for the next few years, but it believes revenue growth and average revenue per active member growth will primarily be driven by credit-related products, which amplify its credit risk. Compass Point noted that investors currently pay around 20 times 2027 EBITDA for Chime, which it views as the “closest publicly traded pure play that is comparable to Cash App.”

According to the note, Compass Point believes Cash App should be valued at 15x EV/adjusted EBITDA, including stock-based compensation, while Square could be valued at 12.1x on 2026 adjusted EBITDA. Based on current market dynamics, “Cash App could be valued at ~10x (or less) EV/EBITDA today,” the analysts said. The firm outlined three reasons to own Block shares: undervaluation of Cash App compared to Chime, upside potential in Cash App gross profit from the anticipated ramp in Cash App Borrow, and higher margin leverage. Compass Point’s estimates are roughly 3% higher on gross profit and 10% above consensus on adjusted EBITDA for 2026, driven by expected growth in lending products.

“We believe investors have been waiting for XYZ’s GP growth to stabilize and re-accelerate, and we anticipate this turn will begin in the 2H25,” Compass Point concluded, urging investors to buy shares ahead of the fundamental reacceleration.

On the other hand, Seaport Global Securities initiated coverage on Chime Financial with a Buy rating and a price target of $37.00. The research firm cited Chime’s strong brand, significant market opportunity with less than 5% penetration, and potential to deepen customer relationships as key factors supporting its positive outlook.

Seaport Global projects Chime will grow its revenue at an annual rate in the high 20% to low 30% range over the next two years, positioning the company for continued expansion.

The firm also highlighted Chime’s opportunity to improve profitability and margin profile as it scales further, expecting these factors to drive an eventual rerating of the stock.

The $37 price target is based on 5.5 times the company’s estimated 2026 enterprise value to sales ratio, according to Seaport Global Securities.