Dave Inc. (DAVE): A Bull Case Theory

We came across a bullish thesis on Dave Inc. on TacticzHazel’s Substack by TacticzHazel Value Investing. In this article, we will summarize the bulls’ thesis on DAVE. Dave Inc.'s share was trading at $195.07 as of October 10th. DAVE’s trailing and forward P/E were 54.03 and 19.72 respectively according to Yahoo Finance.

Dave (DAVE) is a U.S. fintech company that has transformed itself from a troubled SPAC-era stock into a profitable, high-growth player in the micro-lending space. The company’s mobile app helps users avoid overdraft fees, budget more effectively, and access small cash advances before payday, leveraging a scalable AI engine, CashAI, to keep delinquency rates low. Launched in 2017, Dave now serves over 12 million members, with founder Jason Wilk remaining at the helm and fully committed, having held his shares through a 95% stock decline.

Historically, Dave faced regulatory scrutiny, high delinquency rates, and confusion around its tipping-based loan model, which contributed to a DOJ lawsuit and an initial stock drawdown. In March 2025, Dave implemented a new, transparent business model with a $5 flat fee (capped at $15), which increased profitability per loan by roughly 15% and positioned the company for sustainable growth.

Dave’s revenue is driven by three main streams: ExtraCash small loans, subscription fees for budgeting and credit-building tools, and interchange fees from its debit card, with ExtraCash representing the fastest-growing segment at a 55% CAGR. Delinquency rates have been reduced to 1.5–2.5% through real-time AI underwriting linked to users’ bank accounts. While competition from other fintechs exists, Dave maintains a first-mover advantage with lower charge-offs and superior underwriting. Free cash flow has strengthened the balance sheet, enabling $50 million in buybacks and operational flexibility.

Despite temporary concerns from Q2 earnings and ongoing FTC scrutiny, the company remains profitable and scalable. With management guidance for $180–190 million EBITDA in 2025, and potential upside to $220–230 million, market multiples suggest the stock could double or even triple. Dave represents an unloved, yet high-potential fintech at an attractive entry point for investors willing to look past legacy concerns.

Previously we covered a bullish thesis on Dave Inc. (DAVE) by Next 100 Baggers in May 2025, which highlighted its AI-driven micro-lending platform, improved fee model, and strong unit economics. The company's stock price has been flat since our coverage. The thesis still stands as Dave continues scaling profitably. TacticzHazel shares a similar perspective but emphasizes the SPAC-era turnaround, new flat-fee model, and revenue growth potential.

Dave Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held DAVE at the end of the second quarter which was 24 in the previous quarter. While we acknowledge the potential of DAVE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.