DAVE Stock Skyrockets 174% in a Year: Will the Rally Continue?

Dave Inc.’s DAVE shares displayed notable growth in a year. It has surged 173.5%, surpassing the industry’s 17.8% growth and the 20.3% rise in the Zacks S&P 500 Composite.

DAVE has outperformed its industry peers, LiveRamp’s RAMP 6.3% dip and Nable’s NABL 22.9% decline.

1-Year Share Price Performance

Recent performance shows that Dave shares have surpassed LiveRamp and Nable. While DAVE has gained 15.2% in a month, LiveRamp and Nable have lost 2.6% and 3.9%, respectively.

Let us analyze further to find out whether DAVE can continue this growth trajectory, ensuring robust returns to its investors.

CashAI & Fee Model Drive Dave’s Customer Growth

In the third quarter of 2025, the company added 843,000 members, bringing the total to 13.5 million, up 17% year over year. This growth was driven primarily by a 25% year-over-year increase in Dave Card spend. Despite this sharp rise in customer count, the company kept the customer acquisition cost (CAC) flat at $19 compared with the preceding quarter. ExtraCash origination soared 49% year over year, highlighting the company’s success in marketing campaigns.

CashAI v5.5 is a crucial driver for Dave’s customer acquisition as it made a significant contribution toward the 20% rise in average ExtraCash size. Despite the lofty ExtraCash originations growth, the company managed to maintain high credit quality on the back of CashAI v5.5. This AI and machine learning based model was not only able to attract customers but also ensured higher retention and conversion.

Dave’s new fee model is a prominent growth factor. Its new fee model consists of a flat 15% fee on all ExtraCash transactions, with a minimum of a $5 fee and a $15 cap. What made this fee model effective in attracting more customers is that it is simpler than that of the legacy banks. The model is not only easier for customers to grasp but also cheaper for the underserved demography to secure credit, enhancing customer retention.

Dave: A Cheap Stock With Strong Capital Return & Liquidity

DAVE trades at 16.56 times forward 12-month EPS, below the industry average of 26.11 times. Value-oriented investors will find this appealing and might secure significant returns as the market realizes the stock's real value.

Dave’s return on equity (ROE) is significantly higher than the industry average. Currently, its ROE is 77.8%, while the industry average is 15.3%. In terms of return on capital invested (ROIC), Dave’s 48.8% ROIC beats the industry average of 7.7%. These metrics demonstrate strength on the profitability front, suggesting that DAVE’s ability to generate shareholder returns is efficient.

On the liquidity front, DAVE’s current ratio of 8.7 in the third quarter of 2025 has improved from the year-ago quarter’s 6.81, exceeding the industry average of 1.58. As the current ratio exceeds 1, it highlights DAVE’s effective coverage of short-term obligations.

Dave’s Top & Bottom-Line Prospects Appear Strong

The Zacks Consensus Estimate for the company’s 2025 revenues is pinned at $546.1 million, suggesting a 57.3% rise from the prior-year reported level. For 2026, the same is anticipated to increase 20.2%.  

The consensus estimate for 2025 earnings per share is pegged at $12.96, indicating a 147.3% upsurge from the year-ago quarter’s actual. For 2026, the metric is expected to rise 8%.

Add DAVE to Your Portfolio

Dave’s CashAI v5.5 and new fee model are instrumental to its customer acquisition strategy. Its ability to scale is evident in its third-quarter 2025 results, which witnessed total membership soaring to 13.5 million, while ensuring CAC is stable. DAVE’s efficiency is highly impressive as its ROE and ROIC beat the industry average by a significant margin. Furthermore, the company maintains a strong liquidity position.

We recommend investors buy this fundamentally strong stock now that trades at a discount to the industry. Undervaluation and solid financial prospects present a high-growth potential, attracting value-oriented investors.

DAVE sports a Zacks Rank #1 (Strong Buy) at present. 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).

Zacks Investment Research