Latest news with #CashAI
Yahoo
2 days ago
- Business
- Yahoo
Dave Skyrockets 540% in a Year: Should You Buy the Stock Now?
Dave Inc. DAVE stock has shown outstanding growth over the past year. The stock has skyrocketed 540.5%, outperforming the industry's 51.6% rally and the Zacks S&P 500 composite's 12.3% growth. DAVE's performance is significantly higher than that of its industry peers, Katapult Holdings KPLT and MediaAlpha MAX. KPLT and MAX have declined 43.8% and 33.5% over the past year, respectively. Image Source: Zacks Investment Research Dave has also outperformed Katapult Holdings, MediaAlpha, and the industry as a whole in the past six months. DAVE shares have soared 152.6%, outperforming the industry's 3.1% rise. Katapult Holdings and MediaAlpha have gained 38.5% and 3.2% in the past six months, respectively. Image Source: Zacks Investment Research Dave shares have performed exceptionally well over the past year and the past six months. Investors must be flattered by this performance and are planning to initiate a buy. We have analyzed the stock and answered whether buying is the option or if investors should stay away from it. DAVE's CashAI is its proprietary underwriting engine, which has been proven to boost the company's financial performance, as evidenced by the first-quarter 2025 results. During this quarter, non-GAAP variable profit surged 67% year over year, with variable margin growing 950 basis points (bps). The credit goes to CashAI and its ability to improve Dave's cost management strategy, improving its profit margin. CashAI improved customer engagement, with ExtraCash originations increasing 46% year over year to $1.5 billion. Dave managed to approve higher ExtraCash amounts due to CashAI's ability to underwrite profitably despite it being a seasonally soft quarter. Furthermore, it enhanced the company's credit performance, evidenced by a 33-basis-point year-over-year improvement in the 28-day delinquency rate. CashAI leveraged insights and performance data to reduce the percentage of provisions for credit losses to origination from the 0.94% reported in the year-ago quarter down to 0.69%. With an expansion in the training data set, we expect CashAI to identify good risk and maximize approval rates, retaining its competitive edge. The underwriting engine's ability to precisely manage delinquency and loss rates while improving profitability puts Dave further than the existing fintech players that use traditional methods that are slower and less agile. Return on equity (ROE), a measure of profitability, reflects how effectively a company uses its shareholders' investments to generate earnings. Dave's trailing 12-month ROE is 59.2% compared with the industry's average of 6.6%. Image Source: Zacks Investment Research DAVE's current ratio in the first quarter of 2025 was 8.59, significantly higher than the industry average of 1.84. The metric has improved from the previous quarter and the year-ago quarter by 6.7% and 15%, respectively. The current ratio exceeds 1, which signals a positive outlook for investors by indicating the company's capacity to pay off short-term obligations efficiently. Image Source: Zacks Investment Research The Zacks Consensus Estimate for the company's 2025 revenues is pegged at $474.4 billion, suggesting a 36.7% increase from the year-ago reported level. For 2026, the top line is anticipated to rise 24.2% year over year. The consensus estimate for 2025 earnings is $8.74 per share, implying 66.8% growth from the year-ago reported level. For 2026, the bottom line is anticipated to rise 32.3% year over year. Over the past 60 days, two EPS estimates for both 2025 and 2026 have been revised upward with no downward adjustments. In the same period, the Zacks Consensus Estimate for 2025 earnings has gained 31.4% and that for 2026 has soared 42.4%. These upward revisions highlight analysts' growing confidence in Dave's ability to improve its financial performance, fueled by its strong business model and robust growth potential. Image Source: Zacks Investment Research We understand Dave's CashAI, an AI-based underwriting engine, is improving its credit quality. In doing so, the company has enhanced its financial performance and finds itself competing with fintech giants. Banking on this technology, the company can easily dominate in a space where fintech players rely on traditional methods that are slower and less agile. Apart from this, DAVE's robust capital return and strong liquidity position raise the green flag for investors. In addition to that, the company is fundamentally strong and has upward EPS revisions, exuding growing confidence among analysts. Factors like these compel us to recommend a 'Buy' on DAVE stocks. Investors who are looking to dip their hands in the fintech space must add Dave to their portfolio now. 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 MediaAlpha, Inc. (MAX) : Free Stock Analysis Report Katapult Holdings, Inc. (KPLT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
31-05-2025
- Business
- Yahoo
Dave Inc. (DAVE): A Bull Case Theory
We came across a bullish thesis on Dave Inc. (DAVE) on Substack by Next 100 Baggers. In this article, we will summarize the bulls' thesis on DAVE. Dave Inc. (DAVE)'s share was trading at $193.70 as of 21st May. DAVE's trailing and forward P/E were 54.41 and 22.73 respectively according to Yahoo Finance. A close-up of a financial advisor giving advice to a customer, demonstrating the importance of consumer and wealth management. Dave Inc. (DAVE), a neobank fintech, is carving out a significant niche by addressing the financial needs of over 100 million underserved Americans living paycheck-to-paycheck. Through its mobile app, Dave offers instant 'ExtraCash' advances up to $500, spending accounts, and side gig discovery tools. With 2.5 million monthly transacting members and over 10 million users historically, Dave operates in a large and underpenetrated market. The company's pivot to a revised fee model in late 2024 has improved monetization without hurting user retention, and revenue per user is climbing. Backed by strong unit economics, Dave's Q1 2025 saw 47% revenue growth YoY, a 77% variable profit margin, and improved operating leverage. CEO Jason Wilk and insiders, holding 21% of shares, remain aligned with shareholder interests and have demonstrated confidence through share repurchases. The company is now free cash flow positive with $90M in cash and manageable debt, supporting a $50M buyback program. While competition is fierce from banks and other neobanks, Dave's AI-driven underwriting (CashAI) has kept delinquency rates low, giving it an edge. Regulatory risks remain, particularly a DOJ lawsuit over past fee practices, but the company has made compliance-driven changes. Trading at 23x forward earnings and 5.8% FCF yield, Dave's valuation remains attractive given its 30%+ growth and rising profitability. With a favorable risk/reward skew, continued ARPU expansion, and new growth avenues such as larger loans or partnerships, the stock could see significant upside. Even if growth moderates, current execution suggests strong durability and long-term shareholder value creation. Dave Inc. (DAVE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held DAVE at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of DAVE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAVE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
29-05-2025
- Business
- Yahoo
Dave Inc. (DAVE): A Bull Case Theory
We came across a bullish thesis on Dave Inc. (DAVE) on Substack by Next 100 Baggers. In this article, we will summarize the bulls' thesis on DAVE. Dave Inc. (DAVE)'s share was trading at $193.70 as of 21st May. DAVE's trailing and forward P/E were 54.41 and 22.73 respectively according to Yahoo Finance. A close-up of a financial advisor giving advice to a customer, demonstrating the importance of consumer and wealth management. Dave Inc. (DAVE), a neobank fintech, is carving out a significant niche by addressing the financial needs of over 100 million underserved Americans living paycheck-to-paycheck. Through its mobile app, Dave offers instant 'ExtraCash' advances up to $500, spending accounts, and side gig discovery tools. With 2.5 million monthly transacting members and over 10 million users historically, Dave operates in a large and underpenetrated market. The company's pivot to a revised fee model in late 2024 has improved monetization without hurting user retention, and revenue per user is climbing. Backed by strong unit economics, Dave's Q1 2025 saw 47% revenue growth YoY, a 77% variable profit margin, and improved operating leverage. CEO Jason Wilk and insiders, holding 21% of shares, remain aligned with shareholder interests and have demonstrated confidence through share repurchases. The company is now free cash flow positive with $90M in cash and manageable debt, supporting a $50M buyback program. While competition is fierce from banks and other neobanks, Dave's AI-driven underwriting (CashAI) has kept delinquency rates low, giving it an edge. Regulatory risks remain, particularly a DOJ lawsuit over past fee practices, but the company has made compliance-driven changes. Trading at 23x forward earnings and 5.8% FCF yield, Dave's valuation remains attractive given its 30%+ growth and rising profitability. With a favorable risk/reward skew, continued ARPU expansion, and new growth avenues such as larger loans or partnerships, the stock could see significant upside. Even if growth moderates, current execution suggests strong durability and long-term shareholder value creation. Dave Inc. (DAVE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held DAVE at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of DAVE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAVE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
