Chime Financial (CHYM) founder and CEO Christopher Britt is locked in on becoming a major player in the Trump Account game.
The analysis: “The Treasury Secretary announced this weekend that there have now been 6 million signups for Trump Accounts … We also know through surveys that we have hundreds of thousands of our members have already begun the process to set up the Trump Accounts,” Britt said on Yahoo Finance’s Opening Bid (video above).
Trump Accounts are custodial-style traditional IRAs for children under 18, owned by the child but administered by a parent or guardian. Investments are limited to low-cost index funds and ETFs tracking broad US equity indexes like the S&P 500. There are no withdrawals permitted before age 18.
US citizen children born between 2025 and 2028 are eligible for a $1,000 seed contribution directly from the US Treasury.
The accounts officially debut on July 4, coinciding with the 250th anniversary of the United States. This past tax season, Chime began offering its members the ability to enroll in Trump accounts as they file taxes through the app.
Chime is making an initial foray into the investing game, pitting it against larger players such as Robinhood (HOOD). Britt says the fintech bank will launch investment accounts in the next “several” months, which will include accounts that can buy individual stocks and ETFs and a robot adviser.
AlphaSpace intel: Chime’s revenue surged 25% year over year to $647.4 million in its latest quarter, driven by card purchase volume hitting $38.7 billion and strong growth in higher-margin platform products like MyPay, instant transfers, and Instant Loans.
Active members hit a record 10.2 million, with nearly 700,000 net new members added in the quarter, representing 19% year-over-year growth.
The profitability story was the real headline. Q1 marked Chime’s first-ever quarter of positive GAAP net income at $53 million.
Chime’s revenue growth rate has been above 25% for the last three quarters, according to AlphaSpace.
Yet, Chime’s stock continues to be under pressure despite four straight beat-and-raise quarters. Shares are down 29% year to date, badly lagging the S&P 500’s 11% advance.
Bottom line: The Street may be missing the mark on Chime.
The business is growing strongly, the firm has a loyal following, and it’s reaching its profitability period. A potential bank charter approval within the next 18 months could be another tailwind to the business.
“There’s probably a few things that I think are weighing on [the stock] … there’s this malaise about the state of the consumer and when’s the shoe is going to drop? We don’t see it in our data. We still continue to see a very resilient, healthy consumer,” said Britt.
