Contrasting Chime Financial (NASDAQ:CHYM) and StoneCo (NASDAQ:STNE)

Chime Financial (NASDAQ:CHYM) and StoneCo (NASDAQ:STNE) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Profitability

This table compares Chime Financial and StoneCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chime Financial	-0.74%	-1.28%	-0.92%
StoneCo	22.92%	22.19%	4.10%

Risk & Volatility

Chime Financial has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, StoneCo has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

73.2% of StoneCo shares are held by institutional investors. 12.3% of Chime Financial shares are held by company insiders. Comparatively, 11.3% of StoneCo shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Chime Financial and StoneCo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chime Financial	$2.19 billion	5.25	-$1.01 billion	($0.07)	-433.29
StoneCo	$13.59 billion	0.17	$425.73 million	$2.48	3.84

StoneCo has higher revenue and earnings than Chime Financial. Chime Financial is trading at a lower price-to-earnings ratio than StoneCo, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Chime Financial and StoneCo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chime Financial	1	2	17	4	3.00
StoneCo	0	6	4	0	2.40

Chime Financial presently has a consensus price target of $36.40, indicating a potential upside of 20.01%. StoneCo has a consensus price target of $14.30, indicating a potential upside of 50.05%. Given StoneCo’s higher probable upside, analysts clearly believe StoneCo is more favorable than Chime Financial.

Summary

StoneCo beats Chime Financial on 10 of the 15 factors compared between the two stocks.

About Chime Financial

Chime is a financial technology company that partners with federally regulated, FDIC-insured banks—The Bancorp Bank, N.A. and Stride Bank, N.A., Members FDIC—to provide consumer banking products and services. The company’s model is designed to eliminate common fees and simplify access to basic financial services.

Chime does not charge overdraft fees, monthly service fees, or require minimum balances. All account balances are held at partner banks and protected by applicable regulatory safeguards to ensure funds remain secure and accessible.

About StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.