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Dave Stock Soars 127% in YTD: Is This the Right Time to Invest?

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Key Takeaways

  • Dave's shares have soared YTD, far outperforming its industry and key peers.
  • Dave's CashAI engine improved delinquency rates and fueled sharp top and bottom-line growth.
  • Dave raised its revenue and EBITDA guidance as profitability, liquidity and valuation metrics strengthened.

Dave Inc.’s (DAVE - Free Report) shares showed remarkable growth in the year-to-date period. It has surged 126.6%, surpassing the industry’s 25.2% growth and the 20.1% rise in the Zacks S&P 500 Composite.

DAVE has outperformed its industry peers, Parsons’ (PSN - Free Report) 27.3% dip and VerifyMe’s (VRME - Free Report) 46.6% decline.

YTD Share Price Performance

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

The one-year price performances also show that DAVE’s growth exceeds that of Parsons and VerifyMe. Dave has skyrocketed 129%, outperforming Parsons’ 30.9% decline and VerifyMe’s 15.7% growth.

DAVE’s shares have registered impressive growth, prompting some investors to ride the rally. Let us analyze further to conclude whether buying this stock now is a sound choice.

Dave’s Cash AI: The Force Behind Progress

DAVE utilizes its proprietary CashAI engine to manage credit risks. In the third quarter of 2025, the company’s average 28-day delinquency rate declined 7 basis points (bps) sequentially to 2.33%, a positive sign of financial health and stability. In September, this metric was 2.19% due to the new CashAI v5.5. Effective credit risk mitigation led to improving its financial performance, where the top line increased 63% year over year.

The company’s profitability improved due to enhanced customer conversion, which managed to keep customer acquisition costs at $19. It led to a 193% year-over-year upsurge in its adjusted net income.

Banking on CashAI’s prowess, management decided to hike the top-line guidance to $544-$547 million from the preceding quarter’s view of $505-$515 million. Furthermore, adjusted EBITDA guidance was raised to $215-$218 million from $180-$190 million provided in the preceding quarter.

Dave’s Strong Capital Return and Liquidity

Dave’s return on equity (ROE) is massively higher than the industry average. Currently, its ROE is 77.8%, while the industry average is 15.3%. In terms of return on capital invested (ROIC), Dave’s 48.8% ROIC surpasses the industry average of 7.6%. These metrics demonstrate strength on the profitability front, hinting at DAVE’s ability to generate shareholder return efficiently.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

On the liquidity front, DAVE’s current ratio of 8.7 in the third quarter of 2025 has improved from the year-ago quarter’s 6.81, exceeding the industry average of 1.58. As the current ratio exceeds 1, it highlights DAVE’s effective coverage of short-term obligations.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

DAVE Tradies Cheaper Than Its Industry

DAVE trades at 14.13 times forward 12-month EPS, below the industry average of 27.2 times. Dave’s trailing 12-month EV-to-EBITDA ratio is 17.56, below the industry average of 18.86. Both metrics highlight Dave's undervaluation, making it a suitable stock that might experience exponential growth in share prices when the market truly recognizes its potential.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Dave’s Robust Top & Bottom-Line Prospects

The Zacks Consensus Estimate for the company’s 2025 revenues is pinned at $546.1 million, suggesting a 57.3% increase from the prior-year reported level. For 2026, the same is expected to grow 20.2%.  

The consensus estimate for 2025 earnings per share is pegged at $12.96, indicating a whopping 147.3% rally from the year-ago reported level. For 2026, the metric is expected to rise 8%.

Over the past 60 days, two EPS estimates each for 2025 and 2026 have been revised upward, with no downward revisions. During this period, the Zacks Consensus Estimate for 2025 earnings increased 24.7%, and the estimate for 2026 grew 12%. These upward revisions demonstrate analysts' increased confidence.

Add DAVE to Your Portfolio

DAVE’s CashAI mitigates credit risks effectively, boosting the top line and profitability. Management is highly confident in this technology, such that it raised the revenues and profitability outlook for the full year. Dave’s profitability metrics, ROE and ROIC, both have surpassed the industry, signaling effective shareholder return-generating capabilities. A strong liquidity position is an added advantage, perceived as a green flag by the investors.

We recommend investors buy this stock immediately since it is fundamentally strong and trades at a discount to the industry. Undervaluation and solid financial prospects present a high-growth opportunity for investors as the market realizes the stock’s true potential.

DAVE sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.


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