Here's How Dave's Ecosystem Strategy Supports Robust User Engagement

Dave Inc. DAVE ended the third quarter of 2025 with 13.5 million members, representing 17% year-over-year growth. It acquired 843,000 members in this quarter. The company registered a 17% year-over-year increase in monthly transacting members to 2.8 million. This customer retention was primarily due to rising Dave Card spend, which rallied 25% year over year to $510 million.

This lofty growth in customers did not deteriorate the company’s customer acquisition (CAC), and it was at $19 flat with the preceding quarter. Despite a 22.3% sequential increase in advertising and activation costs, an unchanged CAC reflects an improved conversion rate, alluding to an effective marketing strategy. A 49% year-over-year increase in ExtraCash origination highlights the success of DAVE’s marketing campaigns.

CashAI v5.5, Dave’s proprietary underwriting engine, had a significant share in the 20% upsurge in average ExtraCash size. It successfully improved wallet share without compromising its credit quality. By facilitating the rise in ExtraCash originations, CashAI v5.5 was able draw in reliable users, in turn, driving higher retention and conversion.

Behind this excellent growth narrative lies DAVE’s new fee model, which consists of a flat 5% fee on all ExtraCash transactions, with a minimum $5 fee and a $15 cap. This is not only a simplified fee model but also cheaper than legacy banks. This new fee model makes it easier and cheaper for the underbanked/underserved population to access credit, thus improving customer tenure.

DAVE’s Price Performance, Valuation & Estimates

The stock has skyrocketed 146.4% in the past year, significantly outperforming its peers, AppLovin APP and Coherent Corp. COHR, and the industry as a whole. The industry has gained 14%. AppLovin and Coherent have surged 92.2% and 73.7%, respectively.

1-Year Share Price Performance

From a valuation standpoint, DAVE trades at a 12-month forward price-to-earnings ratio of 17.07, lower than AppLovin’s 72.08 and Coherent’s 32.19.

P/E - F12M

DAVE and Coherent have a Value Scoreof D, while AppLovin carries an F.

The Zacks Consensus Estimate for FUTU’s earnings for 2025 and 2026 has increased 24.6% and 11.4%, respectively, over the past 60 days.

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

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This article originally published on Zacks Investment Research (zacks.com).

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