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Dave Inc. (DAVE)
:DAVE
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Dave
(NASDAQ:DAVE)
Rating:76Outperform
Price Target:
$207.00
▲( 4.91% Upside)
Positive Factors
Earnings
Dave Inc. exceeded expectations in both top and bottom lines due to improvements in operating metrics.
Financial Performance
The company experienced a strong rally in its shares, with a notable 41.6% increase due to its exceptional quarterly performance.
User Growth
User growth exceeded expectations, with a significant majority of loans taken by existing users, indicating strong customer retention.
Negative Factors
Economic Conditions
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.
Monetization
Only 60% of 1Q25 loan originations were monetized under the new fee model, indicating potential for further ARPU benefits in the subsequent quarter.
Dave (DAVE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.63B
Dividend YieldN/A
Average Volume (3M)479.14K
Price to Earnings (P/E)54.3
Beta (1Y)2.12
Revenue Growth39.29%
EPS GrowthN/A
CountryUS
Employees274
SectorTechnology
Sector Strength76
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.97
Shares Outstanding11,826,259
10 Day Avg. Volume502,173
30 Day Avg. Volume479,136
Financial Highlights & Ratios
PEG Ratio0.93
Price to Book (P/B)11.65
Price to Sales (P/S)0.00
P/FCF Ratio18.12
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue1.83
Enterprise Value/Gross Profit8.43
Enterprise Value/Ebitda35.86
Forecast
1Y Price Target
$190.00Price Target Upside-3.71% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering7
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 statements reflect a strong turnaround with significant revenue and profit growth, improved margins, and enhanced cash flow performance. The balance sheet exhibits strengthened equity and reduced leverage, signaling financial stability. Despite historic challenges in profitability and cash flow consistency, the current financial health indicates a positive trajectory and robust operational performance, positioning Dave favorably within the software industry.Income Statement
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.78
Positive
Balance Sheet
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.72
Positive
Cash Flow
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.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 347.08M | 259.09M | 204.80M | 153.00M | 121.80M | Gross Profit |
| 240.05M | 135.26M | 172.90M | 129.50M | 100.15M | EBIT |
| 34.61M | -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 Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 90.29M | 155.94M | 191.96M | 32.00M | 22.45M | Total Assets |
| 299.33M | 294.02M | 321.49M | 147.19M | 76.41M | Total Debt |
| 75.55M | 181.29M | 178.15M | 73.64M | 6.11M | Net Debt |
| 25.84M | 139.53M | 155.26M | 41.64M | 1.32M | Total Liabilities |
| 116.23M | 206.96M | 214.93M | 108.45M | 26.56M | Stockholders Equity |
| 183.10M | 87.06M | 106.56M | -33.40M | 49.84M |
| Cash Flow | Free Cash Flow | |||
| 124.88M | 25.17M | -54.20M | -47.18M | -13.37M | Operating Cash Flow |
| 125.14M | 33.75M | -44.88M | -40.70M | -9.15M | Investing Cash Flow |
| -45.84M | -14.38M | -285.58M | 3.00M | 3.42M | Financing Cash Flow |
| -71.00M | 22.00K | 321.77M | 65.05M | 4.24M |
Dave Technical Analysis
Positive
197.32
Price Trends
111.02
Positive
102.92
Positive
79.01
Positive
Market Momentum
27.80
Negative
86.59
Negative
88.07
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 197.32 is above the 20-day moving average (MA) of 149.92, above the 50-day MA of 111.02, and above the 200-day MA of 79.01, indicating a bullish trend. The MACD of 27.80 indicates Negative momentum. The RSI at 86.59 is Negative, neither overbought nor oversold. The STOCH value of 88.07 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 3 New Risks
1.
Our amended and restated certificate of incorporation contains exclusive forum provisions for certain claims, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees. Q4, 2024
2.
If accounting standards change or if our estimates or assumptions relating to our critical accounting policies prove to be incorrect, our results of operations and financial condition could be adversely affected. Q4, 2024
3.
If our settlement of ExtraCash overdrafts is ineffective or unsuccessful, the performance of the overdrafts could be adversely affected. Q4, 2024
Dave Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.63B | 54.29 | 32.09% | ― | 39.29% | ― | |
74 Outperform | $1.46B | 500.00 | 0.49% | ― | 23.31% | ― | |
68 Neutral | $1.43B | 207.10 | 2.81% | ― | 22.75% | -47.45% | |
63 Neutral | $1.24B | ― | -36.95% | ― | 17.79% | 16.49% | |
63 Neutral | $1.58B | ― | -32.87% | ― | 8.56% | -4.21% | |
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% |
* Technology Sector Average
Performance Comparison
DAVE
Dave
197.32
154.21
357.71%
SPT
Sprout Social
21.32
-11.73
-35.49%
OLO
Olo
8.75
4.11
88.58%
SEMR
SEMrush Holdings
9.63
-5.94
-38.15%
AMPL
Amplitude
12.04
2.53
26.60%
Dave Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 82.99%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in revenue, ARPU, and member base, alongside improved credit performance, driven by a new fee structure and strategic partnerships. However, challenges such as increased customer acquisition costs, ongoing litigation with the DOJ, and higher credit loss provisions were noted. Despite these issues, the overall sentiment is positive due to the strong financial performance and strategic advancements.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Total revenue reached a record high of $108 million, representing year-over-year growth of 47%. Adjusted EBITDA grew 235% to $44.2 million, marking the largest dollar increase in company history.
Improved Credit Performance and Delinquency Rates
The 28-day delinquency rate improved by 33 basis points or 18% year-over-year to 1.5%, highlighting the strength of the CashAI underwriting engine.
Expansion in Member Base and ARPU
Total members grew 15% year-over-year to 12.4 million and ARPU expanded by 29% year-over-year, marking the seventh consecutive quarter of double-digit ARPU growth.
Positive Impact of New Fee Structure
The transition to a new fee structure resulted in better-than-expected improvements in conversion, retention, and monetization, significantly enhancing member lifetime value.
Successful Strategic Partnership Transition
A strategic partnership with Coastal Community Bank will support Dave's ExtraCash and banking products, expected to strengthen Dave's ability to launch new products.
Negative Updates
Increased Customer Acquisition Cost (CAC)
CAC in the first quarter increased 13% year-over-year due to strategic refinements in marketing, although it was offset by higher member lifetime value.
Litigation with the Department of Justice
The company is involved in ongoing litigation with the DOJ, with a motion to dismiss the lawsuit filed and a ruling expected in Q3.
Provision for Credit Losses Increase
Provision for credit losses increased by 7% year-over-year to $10.6 million, mainly due to increased origination volumes.
Company Guidance
In the recent earnings call, Dave Inc. announced a robust first quarter performance for fiscal year 2025, with record-setting results across key financial metrics. The company's total revenue reached $108 million, marking a 47% year-over-year increase, driven by a 13% rise in monthly transacting members (MTMs) to 2.5 million and a 29% boost in average revenue per user (ARPU) to $171. Adjusted EBITDA surged by 235% to $44.2 million, reflecting a $31 million year-over-year increase, largely due to operating leverage and improved credit performance facilitated by the Cash AI system. The company also reported a 46% year-over-year increase in ExtraCash originations to over $1.5 billion and a 24% rise in Dave Card spending, reaching $488 million. The transition to a new fee structure for ExtraCash, which involves a flat 5% fee, has positively impacted conversion, retention, and monetization, contributing to enhanced member lifetime value. Consequently, Dave has raised its full-year 2025 guidance for revenue to $460-$475 million and adjusted EBITDA to $155-$165 million, representing significant growth projections from previous estimates.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.