Can Dave Sustain Its ExtraCash Surge While Managing Credit Risks?

Dave Inc. DAVE witnessed a 49% year-over-year rise in its ExtraCash originations in the third quarter of 2025. While $2 billion in ExtraCash originations is significantly impressive, it attracts credit risks. Hence, the vital question that remains on the table is whether the company can mitigate the credit risks while managing the ExtraCash trajectory.

DAVE has incorporated its proprietary AI and machine learning model, CashAI v5.5, into its arsenal to stand tall against the lingering credit risks. This technology is trained on more than 7 million ExtraCash originations and is pretty effective, as evidenced by a reduction in its 28-day delinquency rate to 2.33% from the preceding quarter’s 2.4%.

The company’s net monetization rate paints an optimistic picture. This metric has improved 45 basis points from the year-ago quarter, highlighting its underwriting precision. While the new fee model has generated fruitful results by capturing revenues with ease, it has done so by offsetting the rising risks of larger advances leveraging its CashAI v5.5.

The partnership between Dave and Coastal Community Bank is instrumental to maintaining high ExtraCash origination while managing credit risks. Coastal Community Bank sponsors Dave, including the ExtraCash product. This arrangement enables Coastal Community Bank onboard customers efficiently, accelerating Dave’s business growth and expansion. This move allows DAVE to mitigate credit risks, pivoting toward a capital-light model.

DAVE’s Price Performance, Valuation & Estimates

The stock has skyrocketed 177.5% in the past year, significantly outperforming its peers, Jamf JAMF and Kyndryl Holdings, Inc. KD, and the industry as a whole. The industry has gained 16.9%. Jamf and Kyndryl Holdings have lost 7.8% and 27.8%, respectively.

1-Year Share Price Performance

From a valuation standpoint, DAVE trades at a 12-month forward price-to-earnings ratio of 16.77, higher than Jamf’s 13.08 and Kyndryl Holdings’ 8.94.

P/E - F12M

DAVE carries a Value Score of D, while Jamf and Kyndryl Holdings carry B and A.

The Zacks Consensus Estimate for DAVE’s earnings for 2025 and 2026 is pinned at $12.96 and $14 per share, respectively, unchanged over the past 30 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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