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Can Dave Sustain Its ExtraCash Surge While Managing Credit Risks?
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Key Takeaways
DAVE posted a 49% y/y rise in ExtraCash originations, reaching $2B in 3Q25.
Dave uses CashAI v5.5, trained on 7M originations, cutting the 28-day delinquency rate to 2.33%.
DAVE's Coastal Community Bank partnership supports high originations.
Dave Inc. (DAVE - Free Report) witnessed a 49% year-over-year rise in its ExtraCash originations in the third quarter of 2025. While $2 billion in ExtraCash originations is significantly impressive, it attracts credit risks. Hence, the vital question that remains on the table is whether the company can mitigate the credit risks while managing the ExtraCash trajectory.
DAVE has incorporated its proprietary AI and machine learning model, CashAI v5.5, into its arsenal to stand tall against the lingering credit risks. This technology is trained on more than 7 million ExtraCash originations and is pretty effective, as evidenced by a reduction in its 28-day delinquency rate to 2.33% from the preceding quarter’s 2.4%.
The company’s net monetization rate paints an optimistic picture. This metric has improved 45 basis points from the year-ago quarter, highlighting its underwriting precision. While the new fee model has generated fruitful results by capturing revenues with ease, it has done so by offsetting the rising risks of larger advances leveraging its CashAI v5.5.
The partnership between Dave and Coastal Community Bank is instrumental to maintaining high ExtraCash origination while managing credit risks. Coastal Community Bank sponsors Dave, including the ExtraCash product. This arrangement enables Coastal Community Bank onboard customers efficiently, accelerating Dave’s business growth and expansion. This move allows DAVE to mitigate credit risks, pivoting toward a capital-light model.
DAVE’s Price Performance, Valuation & Estimates
The stock has skyrocketed 177.5% in the past year, significantly outperforming its peers, Jamf (JAMF - Free Report) and Kyndryl Holdings, Inc. (KD - Free Report) , and the industry as a whole. The industry has gained 16.9%. Jamf and Kyndryl Holdings have lost 7.8% and 27.8%, respectively.
1-Year Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, DAVE trades at a 12-month forward price-to-earnings ratio of 16.77, higher than Jamf’s 13.08 and Kyndryl Holdings’ 8.94.
P/E - F12M
Image Source: Zacks Investment Research
DAVE carries a Value Score of D, while Jamf and Kyndryl Holdings carry B and A.
The Zacks Consensus Estimate for DAVE’s earnings for 2025 and 2026 is pinned at $12.96 and $14 per share, respectively, unchanged over the past 30 days.
Image: Bigstock
Can Dave Sustain Its ExtraCash Surge While Managing Credit Risks?
Key Takeaways
Dave Inc. (DAVE - Free Report) witnessed a 49% year-over-year rise in its ExtraCash originations in the third quarter of 2025. While $2 billion in ExtraCash originations is significantly impressive, it attracts credit risks. Hence, the vital question that remains on the table is whether the company can mitigate the credit risks while managing the ExtraCash trajectory.
DAVE has incorporated its proprietary AI and machine learning model, CashAI v5.5, into its arsenal to stand tall against the lingering credit risks. This technology is trained on more than 7 million ExtraCash originations and is pretty effective, as evidenced by a reduction in its 28-day delinquency rate to 2.33% from the preceding quarter’s 2.4%.
The company’s net monetization rate paints an optimistic picture. This metric has improved 45 basis points from the year-ago quarter, highlighting its underwriting precision. While the new fee model has generated fruitful results by capturing revenues with ease, it has done so by offsetting the rising risks of larger advances leveraging its CashAI v5.5.
The partnership between Dave and Coastal Community Bank is instrumental to maintaining high ExtraCash origination while managing credit risks. Coastal Community Bank sponsors Dave, including the ExtraCash product. This arrangement enables Coastal Community Bank onboard customers efficiently, accelerating Dave’s business growth and expansion. This move allows DAVE to mitigate credit risks, pivoting toward a capital-light model.
DAVE’s Price Performance, Valuation & Estimates
The stock has skyrocketed 177.5% in the past year, significantly outperforming its peers, Jamf (JAMF - Free Report) and Kyndryl Holdings, Inc. (KD - Free Report) , and the industry as a whole. The industry has gained 16.9%. Jamf and Kyndryl Holdings have lost 7.8% and 27.8%, respectively.
1-Year Share Price Performance
From a valuation standpoint, DAVE trades at a 12-month forward price-to-earnings ratio of 16.77, higher than Jamf’s 13.08 and Kyndryl Holdings’ 8.94.
P/E - F12M
DAVE carries a Value Score of D, while Jamf and Kyndryl Holdings carry B and A.
The Zacks Consensus Estimate for DAVE’s earnings for 2025 and 2026 is pinned at $12.96 and $14 per share, respectively, unchanged over the past 30 days.
DAVE currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.