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Dave Inc. (DAVE)
:DAVE
US Market

Dave (DAVE) AI Stock Analysis

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DA

Dave

(NASDAQ:DAVE)

74Outperform
Dave's overall stock score reflects a strong financial performance with robust revenue growth and improved margins, supported by positive corporate events like a share buyback plan and strategic partnerships. While technical indicators show mixed momentum, the company's valuation is fair, and the positive sentiment from the earnings call further supports the score. The main risks include ongoing litigation and elevated marketing costs.
Positive Factors
Credit Performance
DAVE's credit performance has continued to improve even as its loan originations have been growing.
Financial Performance
DAVE's remarkable operating performance could be traced back to CashAI and the cash flow-driven underwriting it has enabled.
Growth Trajectory
The company's shares are considered a bargain following the recent decline, given its growth trajectory and strong profitability.
Negative Factors
Economic Factors
DAVE's focus on providing ExtraCash advances to financially stretched U.S. consumers puts it in a very different position from traditional financial institutions in terms of the expected demand for its loans during an economic pullback.
Loan Demand
DAVE is seen as an especially compelling play due to the countercyclical nature of its business model and its sole focus on the U.S. market.
Market Position
DAVE's neobank platform is well-positioned to sustain profitable growth during a potential economic downturn given its strong product-market fit.

Dave (DAVE) vs. S&P 500 (SPY)

Dave Business Overview & Revenue Model

Company DescriptionDave Inc. provides a suite of financial products and services through its financial service online platform. The company offers Insights, a personal financial management tool to manage income and expenses between paychecks for members; ExtraCash, a free overdraft and short-term credit alternative, which allows members to advance funds to their account and avoid a fee; and Side Hustle, a job application portal. It also provides Dave Banking, a digital checking and demand deposit account. The company was founded in 2015 and is based in West Hollywood, California.
How the Company Makes MoneyDave makes money through a combination of subscription fees, transaction fees, and interest income. The company offers a subscription-based model where users pay a monthly fee for access to premium features within the app, such as more advanced budgeting tools and financial insights. Additionally, Dave generates revenue through transaction fees associated with its cash advance services, where users can access short-term funds with nominal fees attached. The company also earns interest on the cash advances it provides. Partnerships with banks and financial institutions further contribute to its revenue by facilitating financial products and services offered through the app.

Dave Financial Statement Overview

Summary
Dave's financial performance has shown a strong turnaround with impressive revenue and profit growth, improved margins, and enhanced cash flow performance. The balance sheet is strengthened with increased equity and reduced leverage, indicating financial stability. Despite historical challenges in profitability and cash flow consistency, the current financial health suggests a positive trajectory.
Income Statement
78
Positive
Dave has exhibited strong revenue growth, increasing from $259.1 million in 2023 to $311.4 million in 2024, a growth rate of approximately 20.2%. The gross profit margin improved from 52.2% to 65.6%, indicating enhanced operational efficiency. Notably, the company transitioned from a net loss of $48.5 million in 2023 to a net income of $57.9 million in 2024, reflecting significant profitability improvements. However, EBIT and EBITDA margins remain negative, suggesting challenges in covering operating expenses and depreciation/amortization costs.
Balance Sheet
72
Positive
The balance sheet shows a robust equity position with an equity ratio of 61.1% in 2024, up from 29.6% in 2023, indicating improved financial stability. The debt-to-equity ratio decreased substantially from 2.08 in 2023 to 0.003, showcasing successful debt reduction efforts. Return on Equity (ROE) turned positive to 31.6% in 2024, reflecting effective shareholder value creation. The improvements in equity and reduction in leverage highlight a strengthened financial foundation, although historic volatility in equity levels poses a potential risk.
Cash Flow
85
Very Positive
Operating cash flow has increased significantly, from $33.8 million in 2023 to $125.1 million in 2024, indicating enhanced cash generation capabilities. Free cash flow has also seen remarkable growth, reaching $124.9 million, demonstrating efficient capital expenditure management and robust liquidity. The operating cash flow to net income ratio is strong at 2.16, signaling effective conversion of income to cash. While past fluctuations in cash flow were evident, the current trajectory presents a positive outlook for cash management.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
311.43M259.09M204.80M153.00M121.80M
Gross Profit
204.40M135.26M172.90M129.50M100.15M
EBIT
-1.04M-42.20M-146.13M-46.90M-2.33M
EBITDA
76.02M-31.08M-113.18M-14.27M-5.08M
Net Income Common Stockholders
57.87M-48.52M-128.90M-20.00M-6.96M
Balance SheetCash, Cash Equivalents and Short-Term Investments
49.81M155.94M191.96M32.00M22.45M
Total Assets
299.33M294.02M321.49M147.19M76.41M
Total Debt
554.00K181.29M178.15M73.64M6.11M
Net Debt
-49.16M139.53M155.26M41.64M1.32M
Total Liabilities
116.23M206.96M214.93M108.45M26.56M
Stockholders Equity
183.10M87.06M106.56M-33.40M49.84M
Cash FlowFree Cash Flow
124.88M25.17M-54.20M-47.18M-13.37M
Operating Cash Flow
125.14M33.75M-44.88M-40.70M-9.15M
Investing Cash Flow
-45.84M-14.38M-285.58M3.00M3.42M
Financing Cash Flow
-71.00M22.00K321.77M65.05M4.24M

Dave Technical Analysis

Technical Analysis Sentiment
Positive
Last Price104.72
Price Trends
50DMA
88.30
Positive
100DMA
91.59
Positive
200DMA
69.12
Positive
Market Momentum
MACD
3.14
Negative
RSI
69.09
Neutral
STOCH
95.93
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAVE, the sentiment is Positive. The current price of 104.72 is above the 20-day moving average (MA) of 86.26, above the 50-day MA of 88.30, and above the 200-day MA of 69.12, indicating a bullish trend. The MACD of 3.14 indicates Negative momentum. The RSI at 69.09 is Neutral, neither overbought nor oversold. The STOCH value of 95.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAVE.

Dave Risk Analysis

Dave disclosed 77 risk factors in its most recent earnings report. Dave reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Dave Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$1.40B24.5542.84%33.94%
OLOLO
72
Outperform
$1.22B-0.13%24.81%98.55%
68
Neutral
$1.54B188.073.46%22.47%872.41%
61
Neutral
$1.24B-31.90%8.32%2.04%
60
Neutral
$10.94B10.58-7.08%2.98%7.52%-12.04%
SPSPT
59
Neutral
$1.25B-39.88%21.66%8.66%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DAVE
Dave
104.72
58.18
125.01%
SPT
Sprout Social
21.44
-6.84
-24.19%
OLO
Olo
7.28
2.41
49.49%
SEMR
SEMrush Holdings
10.40
-2.78
-21.09%
AMPL
Amplitude
9.44
-0.63
-6.26%

Dave Earnings Call Summary

Earnings Call Date:Mar 03, 2025
(Q4-2024)
|
% Change Since: 10.20%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in revenue, profitability, and member growth, alongside successful strategic initiatives like the new fee structure and partnership with Coastal Community Bank. However, challenges such as increased marketing costs and ongoing litigation with regulatory bodies were noted. The positive aspects and future outlook outweigh the challenges, resulting in an overall positive sentiment.
Q4-2024 Updates
Positive Updates
Record-Breaking Revenue and Profitability
Dave achieved over $100 million in quarterly revenue and more than $30 million in quarterly adjusted EBITDA for the first time, marking a significant milestone in their financial performance.
Strong Member Growth and Retention
Multi-transacting member (MTM) growth remained strong, with a 17% year-over-year increase in Q4 to 2.5 million MTMs, supported by stable customer acquisition costs (CACs) and enhanced member retention.
ARPU and Credit Performance Improvement
Average Revenue Per User (ARPU) exceeded expectations, driven by expanding average extra cash sizes and improved engagement. Credit performance improved with a 53-basis point improvement in the 28-day delinquency rate.
Successful Transition to New Fee Structure
Dave transitioned to a new fee structure for ExtraCash with positive conversion, retention, and monetization trends, fully migrating by February 19, 2025.
Strategic Partnership with Coastal Community Bank
Dave finalized a new strategic partnership with Coastal Community Bank, enhancing their ability to sponsor ExtraCash and banking products.
Negative Updates
Increased Marketing Costs
Advertising and marketing costs increased by 25% year-over-year to $12.6 million in Q4, reflecting a stronger investment appetite despite higher CACs.
Litigation with FTC and DOJ
Dave is involved in litigation filed by the FTC and DOJ concerning consumer disclosures and consent processes, which could impact their legal position moving forward.
Company Guidance
In the conference call discussing Dave's financial results for the fourth quarter and full year ended December 31, 2024, the company provided key metrics and guidance reflecting strong performance and future expectations. Dave achieved a record-setting fourth quarter with over $100 million in quarterly revenue and more than $30 million in quarterly adjusted EBITDA for the first time. The company surpassed original and updated guidance throughout 2024, driven by a 17% year-over-year growth in Multi-Transacting Members (MTMs) to 2.5 million and a 44% increase in ExtraCash originations to $1.5 billion. Member acquisition grew 12% year-over-year, supported by a 26% increase in marketing spend, while maintaining a 12% increase in Customer Acquisition Cost (CAC). Average Revenue Per User (ARPU) expanded for six consecutive quarters, up 18% year-over-year in Q4. Credit performance improved, with a 53-basis point or 24% year-over-year improvement in the 28-day delinquency rate. The company also transitioned to a new fee structure for ExtraCash, introducing a 5% fee on transactions, which is expected to further enhance monetization and retention. For 2025, Dave anticipates GAAP revenue growth between 20% and 25%, and adjusted EBITDA growth between 27% and 39%, indicating another year of record performance.

Dave Corporate Events

Stock Buyback
Dave Inc. Announces $50 Million Share Buyback Plan
Positive
Mar 10, 2025

On March 10, 2025, Dave Inc. announced that its Board of Directors has authorized a share repurchase program to buy back up to $50 million of its outstanding Class A common stock. This decision reflects the company’s confidence in its financial strength and long-term growth potential, aiming to enhance shareholder value. The repurchase program will be executed based on market conditions and may involve various methods, including open market and privately negotiated transactions. The program does not obligate Dave to repurchase a specific number of shares and can be modified or terminated at any time.

Product-Related AnnouncementsBusiness Operations and Strategy
Dave Partners with Coastal Community Bank for Expansion
Positive
Mar 3, 2025

On February 27, 2025, Dave Operating LLC, a subsidiary of Dave Inc., entered into a Program Agreement with Coastal Community Bank to offer Dave-branded deposit accounts and cards. This partnership, announced on March 3, 2025, will enable Dave to expand its banking and ExtraCash products, improving financial inclusion for underbanked populations. Coastal Community Bank will act as a sponsor bank, sharing interchange revenue with Dave and supporting its mission to provide accessible financial services. The agreement is set for an initial term of five years, with options for renewal, and marks a significant milestone in Dave’s growth strategy.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.