DAVE Rallies 133% YTD: Is Acquiring the Stock Now Justified?
The stock has outpaced its industry peers, CoreCard CCRD and Qifu Technology QFIN. CoreCard and Qifu Technology have gained 24.1% and 10.5%, respectively, over the same period.
YTD Price Performance
Image Source: Zacks Investment Research
DAVE has outperformed its industry peers in the past three months as well. Dave has skyrocketed 140.3%, exceeding CoreCard's and Qifu Technology's 38.9% and 47.6% growth, respectively.
The stock's performance over the past three months and the year-to-date period is noteworthy, spiking investors' interest, prompting them to buy the shares for the long run. Let us assess DAVE's performance to conclude whether it deserves a place in investors' portfolios.
Dave's ExtraCash: Guiding Through the Neobank Market
The underbanked demography is often neglected by traditional banks, forcing them to find shade under neobanks. Hence, the rising needs of these non-prime/sub-prime consumers become a driving force in the neobank market, such that currently it is anticipated to expand, seeing a CAGR of 40.3% from 2025 to 2034.
DAVE, one of the leading names in the neobank market, meets the rising demand of the underbanked through ExtraCash. This service addresses the challenges faced by the underbanked by offering interest-free cash advances up to $500. What appeals to consumers is that there are no traditional credit checks. Dave assesses bank account history and spending patterns to determine customers' creditworthiness, enabling the company to extend credit to sub-prime or non-prime consumers with limited credit history.
The company simplified its optional fee model, wherein consumers will pay a 5% fee with a $5 minimum and a $15 cap. This brand-new fee structure enhances transparency around ExtraCash advances, strengthening the company's position among the underbanked. Since consumers can avail of ExtraCash via DAVE's mobile-first platform, we expect the rising popularity of mobile banking to provide an impetus to the company's gains.
The risk profile of a consumer who uses ExtraCash may concern investors. To reduce the risks, DAVE has implemented CashAI, its proprietary underwriting engine. This technology has improved customer engagement, with ExtraCash originations increasing 46% year over year to $1.5 billion during the recent March quarter. A tell-tale sign of CashAI's success is the increase in the company's 28-day delinquency rate by 33 basis points year over year in the first quarter of 2025.
DAVE: Discounted With Solid Financials
Dave shares appear cheap, raising a green flag for investors. The stock is currently priced at 19.74X forward 12-month earnings per share, lower than the industry's average of 23.35X.
Image Source: Zacks Investment Research
The return on equity (ROE) and return on invested capital (ROIC) capture DAVE's impressive profitability position. Currently, the company's trailing 12-month ROE stands at 59.2% way above the industry average of 6.6%. In terms of ROIC, Dave's 26.7% looks promising when compared with the industry's -8.5%.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Dave's striking liquidity position should reassure investors of the company's solid financial position. In the recent March quarter, the company's current ratio of 8.59 exceeded the industry average of 1.84, increasing 15% from the year-ago quarter on the back of higher ExtraCash receivables. A current ratio exceeding 1 suggests that the company can cover short-term obligations effectively.
Image Source: Zacks Investment Research
Dave's Top & Bottom-Line Outlook Appears Promising
The Zacks Consensus Estimate for the company's 2025 revenues is $475.8 million, suggesting a 36.7% rise from the prior-year reported level. For 2026, revenues are estimated to increase 23.8% year over year. The consensus estimate for 2025 earnings per share is $8.76, hinting at a 67.2% surge from the year-ago reported level. The same is anticipated to rise 35.1% year over year in 2026.
Verdict: Buy DAVE Now
Dave appears to be a compelling investment opportunity for now. ExtraCash, which is the company's main product, is successful at catering to the growing needs of the underbanked in an expanding neobank market. The company has simplified its fee structure, strengthening its position. Dave's CashAI has shown promising results in reducing credit risk, steering away from the talks serving risky profiles.
The company's optimistic top and bottom-line outlook reflects its strong fundamentals. With that, the stock possesses a discounted valuation, which captures investors' attention. A strong profitability and liquidity position should reassure investors about the company's robust financials.
Taking all these factors into consideration, we recommend that investors buy the stock right now and expect a significant return in the long run.
DAVE sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dave Inc. (DAVE) : Free Stock Analysis Report
Qifu Technology, Inc. (QFIN) : Free Stock Analysis Report
CoreCard Corporation (CCRD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Why UnitedHealth Stock Is Skyrocketing Today (Hint: Warren Buffett)
Key Points Berkshire Hathaway's latest SEC filing revealed that the company has taken a $1.6 billion stake in UnitedHealth Group. Berkshire added a few others while reducing stakes in both Apple and Bank of America. UnitedHealth has faced several challenges this year, including the revelation of multiple DOJ investigations and the resignation of its CEO. 10 stocks we like better than UnitedHealth Group › Shares of UnitedHealth Group (NYSE: UNH) are jumping on Friday, up 13.8% as of 2:14 p.m. ET. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) declined 0.1% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 0.3%. The troubled health insurance giant is finally seeing its stock rebound after months of trouble, thanks to the purchase of 5 million shares by Warren Buffett's Berkshire Hathaway. Berkshire buys UNH Berkshire Hathaway's latest regulatory filing revealed that the company took a considerable stake in UnitedHealth. The 5 million-share, $1.6 billion stake makes the massive health insurer the 18th-biggest position in Berkshire's portfolio. Buffett's company also trimmed its positions in Apple and Bank of America. The move took Wall Street by surprise, given the many issues UnitedHealth faces, and the revelation sent shares soaring immediately. UnitedHealth is struggling The company's most recent quarterly report revealed a darkening financial picture, including a significant miss on earnings per share, as costs from medical care continue to balloon. The company was also forced to suspend guidance as it tries to adapt to the shifting market. Its financial woes are far from the company's only issues, having recently suffered the sudden departure of its CEO for "personal reasons." The departure comes as the company faces two Department of Justice (DOJ) probes -- one criminal and one civil -- into its Medicare billing practices. Buyer beware It's hard to disagree with the Oracle of Omaha, but there are just too many issues facing UnitedHealth at the moment and with no clear picture of an imminent turnaround. I would stay away from the stock. Should you invest $1,000 in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Bank of America is an advertising partner of Motley Fool Money. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. Why UnitedHealth Stock Is Skyrocketing Today (Hint: Warren Buffett) was originally published by The Motley Fool
CNBC
an hour ago
- CNBC
Fed policy will be the major focus next week for a market that's trying to broaden out
Whatever is the future path of monetary policy could decide what happens next for a stock market that's struggling to broaden out and extend leadership beyond the companies that have worked so far in 2025. Central bank officials from around the globe will convene next week in Jackson Hole, Wyoming for the Federal Reserve's annual economic symposium , an event that will be closely watched for any clues from Fed Chair Jerome Powell as to what will happen at its remaining policy meetings this year, in September, October and December. This week, the prospect of more interest rate cuts — potentially even a supersized half point next month — drove up parts of the market that have been left behind. The Russell 2000 rallied more than 3%, headed for its best week since May, when some technical analysts had anticipated a small cap summer. The equal weight S & P 500 outperformed. Health care, this year's laggard, was the best-performing S & P 500 sector , climbing almost 5% this week. So long as rate cuts are coming — without a a slowing economy or rise in inflation — the reversal in fortunes for the market's former laggards may continue. That would be a boon for an overvalued market that has again depended on a handful of its biggest winners for this year's gains. "Will small-, mid-caps outperform large caps? That's the question," said Brian Leonard, portfolio manager at Keeley Gabelli Funds. "We think there's a possibility they do." Potentially, Fed Chair Powell could throw cold water on the market if he takes a more hawkish stance than expected at Jackson Hole next week, especially as macroeconomic concerns persist. But many market observers are certain that the typically staid Fed chief will do his best not to show his cards. Leonard, for one, said he's cautiously optimistic on the broader equity market. On Friday, the major averages were each headed for a winning week, with the Dow Jones Industrial Average higher by nearly 2% and the S & P 500 and Nasdaq Composite each up roughly 1%. Future of the Fed The Fed will come under the spotlight next week at a critical time. The Trump administration is actively searching for the next Fed chief to succeed Powell when his term ends next May, a race that is raising questions about Fed independence. This week, it was revealed there are 11 potential candidates , including Jefferies Chief Market Strategist David Zervos, former Fed Governor Larry Lindsey and BlackRock chief investment officer for global fixed income Rick Rieder. Many of the candidates, including Zervos and Rieder, have publicly called for aggressive interest rate cuts. It's a likely prerequisite for President Donald Trump, whose rising hostility toward Powell has hinged on the Fed having yet to lower interest rates this year. Trump has unleashed a barrage of barbs, calling Powell — who Trump nominated as Fed chair in late 2017 — "TOO LATE," and "stupid," among other epithets. Yet, economists expect that Powell is more likely to use his time on the podium in Wyoming to address how monetary policy could change in the years ahead. He's scheduled to speak at 10 a.m. ET next Friday, Aug. 22. This week, Sarah House, senior economist at Wells Fargo Economics, wrote that the Fed will likely outline an approach that abandons a policy of allowing inflation to sometimes run a little above 2% to make up for periods when inflation was lower than 2%, and instead target "a simple 2% inflation target, where it does not try to make up for past misses." Other changes could include tying its maximum employment objective more directly to its inflation goal, House said. "We'll find out what Mr. Powell says next week at the Jackson Hole symposium — if there is a likelihood of a cut or not, and we'll see what his commentary is," Leonard, the portfolio manager, said. Fed minutes next week could also illustrate the current dynamic at the central bank, given that the last meeting had two policymakers dissenting from the group and voting in favor of lower interest rates. It was the most meaningful dissent since late 1993. Caution and optimism The stock market continues to perform extraordinarily well this year, defiant of macroeconomic and geopolitical concerns. Yet, with August and September both months that show seasonally weaker prices, and investors continuing to scan for signs of the tariff impact on business, Wall Street is bracing for continued, near-term choppiness. Next week Target and Walmart report earnings results. The big box retailers are likely to provide crucial commentary on the state of consumer spending during the critical back-to-school season. Week ahead calendar All times ET. *2025 Federal Reserve Bank of Kansas City's Economic Policy Symposium in Jackson Hole, Wyoming on "Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy" takes place Aug. 21-23 Monday, Aug. 18 10:00 a.m. NAHB Housing Market Index (August) Earnings: Palo Alto Networks Tuesday, Aug. 19 8:30 a.m. Building Permits preliminary (July) 8:30 a.m. Housing Starts (July) Earnings: Keysight Technologies , Jack Henry & Associates , Home Depot Wednesday, Aug. 20 2:00 p.m. FOMC Minutes Earnings: TJX , Analog Devices , Estee Lauder Companies , Target , Lowe's Companies Thursday, Aug. 21 8:30 a.m. Continuing Jobless Claims (08/09) 8:30 a.m. Initial Claims (08/16) 8:30 a.m. Philadelphia Fed Index (August) 9:45 a.m. PMI Composite preliminary (August) 9:45 a.m. S & P PMI Manufacturing preliminary (August) 9:45 a.m. S & P PMI Services preliminary (August) 10:00 a.m. Existing Home Sales (July) 10:00 a.m. Leading Indicators (July) Earnings: Workday , Ross Stores , Intuit , Walmart Friday, Aug. 22
Business Insider
an hour ago
- Business Insider
Bank of America shares an eye-popping chart showing a potential stock-market bubble: 'It better be different this time'
Stock-market bulls convinced of the power of AI to transform the economy often shrug off comparisons to the dot-com bubble a quarter century ago. The real profits are already showing up, unlike in the early days of the internet boom — so it is different this time, the thinking goes. But Bank of America strategist Michael Hartnett has a message for these investors: "It better be different this time." Hartnett, who has often expressed skepticism of the market's bull run over the last few years, shared a head-turning chart that highlights just how optimistic investors have become about the impact AI will have. It shows the S&P 500's price-to-book ratio, which measures the total market cap of the index's constituents compared to their total assets minus liabilities. The valuation measure is at a record high of 5.3, topping the 5.1 level seen in March 2000, at the peak of the dot-com bubble. Other classic valuation measures show market froth relative to history. For instance, Hartnett also shared a chart showing the S&P 500's 12-month forward price-to-earnings ratio. Except for August 2020, it's at the highest level since the dot-com era. And the Shiller cyclically-adjusted price-to-earnings ratio, which measures current prices against a 10-year rolling average of earnings, is at similar levels to 1929, 2000, and 2021. GuruFocus High valuations reflect high expectations for future earnings. Sometimes those expectations turn out to be too elevated, and prices correct, but they don't necessitate a bubble scenario. So far, many AI firms have continually beat earnings expectations, suggesting the optimism could be justified. Valuations are also better predictors of average long-term returns than near-term performance, and views on Wall Street on where the market goes in the months ahead differ. Though there are calls for caution, many strategists continue to raise their year-end S&P 500 price targets. Earlier this week, Rick Rieder, the chief investment officer of global fixed income at BlackRock, said the market is in the "best investing environment ever" thanks to factors like strong demand for stocks, looming rate cuts, and recent boosts in productivity and earnings growth. If the market does start to unwind, however, Hartnett said he sees bonds and non-US stocks benefiting. Examples of funds that offer exposure to these trades include the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard FTSE All-World ex-US ETF (VEU).
