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Dave's 28 DPD Rate Hits Historic Q1 Low: Is Credit Risk Under Control?
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Key Takeaways
Dave grew ExtraCash originations 37% y/y in Q1'26, while 28-day DPD fell to 1.69%.
CashAI v5.5 lifted net monetization to 5.1% and helped scale Monthly Transacting Members 18% y/y.
Q1 ended Tuesday, mechanically lifting loss reserves; Dave raised 2026 revenue guidance to $710-$720M.
Dave Inc. (DAVE - Free Report) demonstrated noteworthy advancements in its credit risk management apparatus in the first quarter of 2026. It managed to scale originations without deteriorating portfolio quality, reporting enhancements in its primary credit indicators.
DAVE reported a 37% year-over-year increase in ExtraCash originations in the first quarter of 2026. Concurrently, the 28-day past-due (DPD) rate, DAVE’s vital credit management barometer, dipped to a record low of 1.69% from 1.7% in the year-ago quarter.
It marked the first time the company had reduced its 28 DPD rate metric since its new fee structure was implemented. This feat was achieved despite the impacts of tax refund distributions in the first quarter of 2026, which reduced consumer reliance on short-term liquidity and lowered credit demand.
Management attributes this upbeat performance to the AI and machine learning-based model, CashAI v5.5. This model’s risk-evaluation capabilities allowed the company to scale Monthly Transacting Members by 18% year over year while maintaining a strong credit profile. This credit management lifted the net monetization rate to 5.1%, marking the highest level achieved over the past four years.
Despite Dave’s underlying book performing 10% better than the fourth quarter of 2025 on a 28 DPD rate basis, the company experienced a sequential increase in provision for credit losses. This spike was mechanical and calendar-driven because the first quarter of 2026 ended on a Tuesday, representing the intra-week peak for outstanding customer receivables. It implies that the platform was structurally compelled to book a higher loss reserve.
Management stated that if the quarter had ended on the preceding Friday, provisions would have declined by nearly $5 million, and the adjusted gross margin would have increased to 75% instead of the 72% reported in the first quarter of 2026.
Banking on credit efficiency, Dave’s net operating revenues climbed 47% year over year in the first quarter of 2026. It was accompanied by a 101% year-over-year upsurge in net income, with adjusted EBITDA skyrocketing 57%. These optimistic numbers led management to raise the top-line guidance for 2026 to $710-$720 million and upgrade the adjusted EPS outlook to $16.25-$16.75. Dave’s ability to sustain its growth trajectory depends on managing credit risks as it prepares to roll out its CashAI v6.0.
DAVE’s Price Performance, Valuation & Estimates
Dave has jumped 31.4% in the past year, significantly outperforming the 9.7% return of its industry. The stock has outperformed its industry peer, First Advantage Corporation’s (FA - Free Report) 15.9% dip and Futu Holdings’ (FUTU - Free Report) 22% rally during the same timeframe.
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 14.18, higher than First Advantage’s 11.81 and Futu Holdings’ 10.54.
P/E F12M
Image Source: Zacks Investment Research
Dave has a Value Score of C, whereas First Advantage and Futu Holdings carry a Value Score of B and A, respectively.
The Zacks Consensus Estimate for Dave’s 2026 and 2027 earnings has risen 6.2% and 7.1%, respectively, over the past 60 days.
View the Zacks #1 Rank List
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Dave's 28 DPD Rate Hits Historic Q1 Low: Is Credit Risk Under Control?
Key Takeaways
Dave Inc. (DAVE - Free Report) demonstrated noteworthy advancements in its credit risk management apparatus in the first quarter of 2026. It managed to scale originations without deteriorating portfolio quality, reporting enhancements in its primary credit indicators.
DAVE reported a 37% year-over-year increase in ExtraCash originations in the first quarter of 2026. Concurrently, the 28-day past-due (DPD) rate, DAVE’s vital credit management barometer, dipped to a record low of 1.69% from 1.7% in the year-ago quarter.
It marked the first time the company had reduced its 28 DPD rate metric since its new fee structure was implemented. This feat was achieved despite the impacts of tax refund distributions in the first quarter of 2026, which reduced consumer reliance on short-term liquidity and lowered credit demand.
Management attributes this upbeat performance to the AI and machine learning-based model, CashAI v5.5. This model’s risk-evaluation capabilities allowed the company to scale Monthly Transacting Members by 18% year over year while maintaining a strong credit profile. This credit management lifted the net monetization rate to 5.1%, marking the highest level achieved over the past four years.
Despite Dave’s underlying book performing 10% better than the fourth quarter of 2025 on a 28 DPD rate basis, the company experienced a sequential increase in provision for credit losses. This spike was mechanical and calendar-driven because the first quarter of 2026 ended on a Tuesday, representing the intra-week peak for outstanding customer receivables. It implies that the platform was structurally compelled to book a higher loss reserve.
Management stated that if the quarter had ended on the preceding Friday, provisions would have declined by nearly $5 million, and the adjusted gross margin would have increased to 75% instead of the 72% reported in the first quarter of 2026.
Banking on credit efficiency, Dave’s net operating revenues climbed 47% year over year in the first quarter of 2026. It was accompanied by a 101% year-over-year upsurge in net income, with adjusted EBITDA skyrocketing 57%. These optimistic numbers led management to raise the top-line guidance for 2026 to $710-$720 million and upgrade the adjusted EPS outlook to $16.25-$16.75. Dave’s ability to sustain its growth trajectory depends on managing credit risks as it prepares to roll out its CashAI v6.0.
DAVE’s Price Performance, Valuation & Estimates
Dave has jumped 31.4% in the past year, significantly outperforming the 9.7% return of its industry. The stock has outperformed its industry peer, First Advantage Corporation’s (FA - Free Report) 15.9% dip and Futu Holdings’ (FUTU - Free Report) 22% rally during the same timeframe.
1-Year Share Price Performance
From a valuation standpoint, DAVE trades at a 12-month forward price-to-earnings ratio of 14.18, higher than First Advantage’s 11.81 and Futu Holdings’ 10.54.
P/E F12M
Dave has a Value Score of C, whereas First Advantage and Futu Holdings carry a Value Score of B and A, respectively.
The Zacks Consensus Estimate for Dave’s 2026 and 2027 earnings has risen 6.2% and 7.1%, respectively, over the past 60 days.
DAVE currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.