Barrington has increased its price target for Dave (DAVE, Financial) from $110 to $150, while maintaining an Outperform rating on the stock. This decision follows the company's impressive first-quarter performance, surpassing expectations. According to the firm, Dave's new fee structure is driving better financial outcomes, notably in terms of increased ExtraCash generation, improved monetization, and enhanced lifetime value of its members.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Dave Inc (DAVE, Financial) is $126.13 with a high estimate of $145.00 and a low estimate of $109.00. The average target implies an downside of 13.18% from the current price of $145.27. More detailed estimate data can be found on the Dave Inc (DAVE) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Dave Inc's (DAVE, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Dave Inc (DAVE, Financial) in one year is $35.98, suggesting a downside of 75.23% from the current price of $145.27. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Dave Inc (DAVE) Summary page.
DAVE Key Business Developments
Release Date: March 04, 2025
- Revenue: $100.9 million in Q4, a 38% increase year-over-year.
- Adjusted EBITDA: $33.4 million in Q4; excluding a one-time benefit, $32.3 million.
- Non-GAAP Variable Profit: $72.6 million in Q4, a 72% margin relative to total revenue.
- Provision for Credit Losses: $16.6 million in Q4, a 15% increase year-over-year.
- GAAP Net Income: $16.8 million in Q4, an improvement of $16.6 million versus Q4 of last year.
- Adjusted Net Income: $29.6 million in Q4 compared to $6.6 million in Q4 2023.
- Cash and Cash Equivalents: $91.9 million as of quarter end.
- ExtraCash Originations: $1.5 billion in Q4, up 44% year-over-year.
- Member Acquisition Growth: 12% year-over-year in Q4.
- Average Revenue Per User (ARPU): Increased 18% year-over-year in Q4.
- Marketing Costs: $12.6 million in Q4, a 25% increase year-over-year.
- Compensation-Related Expenses: $27.2 million in Q4, up from $23.5 million in the prior year period.
- Dave Card Spending: $457 million in Q4, up 24% year-over-year.
- CashAI Underwriting Model: Improved 28-day delinquency rate by 53 basis points year-over-year.
- 2025 Revenue Guidance: Expected to range between $415 million and $435 million.
- 2025 Adjusted EBITDA Guidance: Expected to range between $110 million and $120 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dave Inc (DAVE, Financial) achieved record-setting fourth quarter results with over $100 million in quarterly revenue and more than $30 million in quarterly adjusted EBITDA.
- The company surpassed its original and updated guidance for 2024, driven by strong performance across all key business areas.
- Monthly Transacting Member (MTM) growth remained robust, supported by stable customer acquisition costs (CACs) and enhanced member retention.
- The new fee structure for ExtraCash transactions is expected to improve monetization and align better with customer needs, potentially increasing credit access.
- Dave Inc (DAVE) finalized a strategic partnership with Coastal Community Bank, enhancing its ability to offer next-generation financial products.
Negative Points
- The company is facing litigation from the Federal Trade Commission and the Department of Justice regarding consumer disclosures and fee consent processes.
- Advertising and marketing costs increased by 25% year-over-year, reflecting a higher investment in customer acquisition.
- Provision for credit losses increased by 15% year-over-year due to higher origination volumes, despite improved credit performance.
- The transition to the new fee model may not have significantly improved conversion rates for Dave Card adoption.
- There is uncertainty regarding the impact of lower tax refunds on consumer behavior and credit performance in the upcoming year.
