DAVE Stock Soars 79% in a Year: Should Investors Buy It Now?

Dave Inc. DAVE stock has shown explosive growth over the past year. The stock has skyrocketed 78.5%, outperforming the industry's marginal rise and the Zacks S&P 500 composite's 18.3% growth.

1-Year Share Price Performance

Let us analyze this stock to find out whether investors should ride the rally or stay away from it.

Dave’s Fee Model & CashAI: Forces Behind Customer Growth

In the third quarter of 2025, DAVE added 843,000 members, and it is not a one-off event, as evidenced by consistent growth in members across the past quarters. Its business model is the ultimate hack to entice customers. The new fee model consists of as little as $0 per transaction with 5% fee structure, including a $5 fee and a $15 cap. This simple model is the prime selling point of the company’s offerings. Dave targets the underbanked/underserved population that struggles to opt for credit easily, making it a simpler alternative to legacy banks.

Having said that, Dave’s CashAI v5.5 is vital to customer acquisition and made a significant contribution toward the 20% rise in average ExtraCash size. Despite this explosive growth, the company maintained a high credit quality, leveraging its AI-based model. Management is betting on this technology’s performance, and we have witnessed a consistent boost in top and bottom-line growth expectations on the back of CashAI v5.5.

Dave’s Superior Margins Than Upstart & Affirm

DAVE holds an extraordinary margin profile that beats its competitors, Upstart UPST and Affirm AFRM. Over the past four quarters, Dave’s trailing 12-month EBITDA margin showed a consistent increment, with 30.6% being the figure realized during the third quarter of 2025. Although Affirm showed consistency in this metric, signalling efficiency in its core operations, the figure stood at 6.9% in the second quarter of fiscal 2026.

On a similar note, Upstart generated 3.7% in trailing 12-month EBITDA in the third quarter of 2025 after it logged a negative in its metric over the past few quarters. While both Affirm and Upstart managed to witness an operationally efficient quarter, DAVE is an outlier that has achieved software-like efficiency.

Dave: Cheap Stock With Upbeat Financials

On the profitability front, DAVE’s trailing 12-month return on equity (ROE) is at 77.8%, surpassing the industry average of 15.6%. The company also delivered impressively in trailing 12-month return on invested capital (ROIC). It generated a ROIC of 48.8%, beating the industry average of 7.7%.

The company’s profitability is further reinforced by its liquidity position. As of the end of September 2025, DAVE generated $92 million in cash reserves against no current debt, providing a solid foundation to incur short-term obligations to finance its operations. Furthermore, its current ratio is at 8.7, beating the industry average of 1.6, improving its efficacy at paying off its short-term obligations.

In terms of valuation, the stock is priced at 12.7 times forward 12-month earnings per share, below the industry average of 22.8 times. Dave presents a classic value play, as evidenced by its strong financials and cheaper valuation.

DAVE’s Strong Fundamentals Meet Rising Analyst Optimism

The Zacks Consensus Estimate for the company’s 2026 revenues is $656.4 million, indicating 19.6% growth from the year-ago reported level. The consensus estimate for EPS is $14.07 per share, suggesting an 8.6% year-over-year rise.

Over the past 60 days, one 2026 EPS estimate has moved upward with no downward adjustment. During the same period, the Zacks Consensus Estimate for 2026 earnings has moved up marginally. This northward revision highlights analyst confidence.

Verdict: Buy DAVE Now

Dave's success is tied to its innovative business model and CashAI v5.5, allowing it to add members consistently while maintaining a solid credit profile. DAVE’s solid EBITDA margin and ROE position it to beat its competitors. A robust liquidity profile eases its way to secure debt and pay it off effectively as well.

We recommend investors buy this fundamentally strong stock that is valued at a discount. Investors adding this stock to their portfolio will draw in higher returns as soon as the market realizes its true value.

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