Is CAC Optimization DAVE's Fuel to Its Profitability Engine?

Dave Inc. DAVE has historically maintained customer acquisition costs (CAC) of $18-$19. In the second and third quarters of 2025, the company maintained a CAC of $19, a result of the optimized marketing investments that yield the highest expected gross margin.

Dave’s marketing initiative is the soul of its customer acquisition strategy. We have observed the company to have been investing more in marketing to attract customers. In the third quarter of 2025, the company attracted 843,000 members, an increase from the preceding quarter’s 722,000, which is evident from the success derived from its marketing initiatives.

This strategy has yielded tangible results in terms of improving financial performance across the quarters. In the third quarter of 2025, the top line surged 64% from the year-ago quarter after a 47% hike during the second quarter. On a similar note, adjusted EBITDA skyrocketed 235% and 236% year over year in the second and third quarters of 2025.

Moreover, the adjusted net income logged a 347% year-over-year upsurge in the second quarter of 2025 and then witnessed a 233% jump. This growth trajectory highlights DAVE’s CAC optimization strategy, reflecting improved customer value and a reformed fee structure.

While the company did operate under a lower CAC than what it achieved in the third quarter of 2025, it did not shake its profitability engine. DAVE resorted to focusing on maintaining an effective and strong user acquisition funnel that hinged on a higher CAC, attracting more members, thereby enhancing its financial status. Therefore, it is certain that DAVE’s long-term picture fits a strategic approach that elevates its focus on improving customer lifetime value.

DAVE’s Price Performance, Valuation & Estimates

The stock has soared 56.2% over the past year compared with the industry’s 10.2% dip and the 15.1% rise of the Zacks S&P 500 composite. DAVE outperformed its industry peers Agora’s API and LiveRamp’s RAMP 16.5% and 25.9% declines, respectively.

1-Year Share Price Performance

From a valuation perspective, DAVE trades at a forward price-to-earnings ratio of 12.15, lower than the industry’s 21.76X. Agora and LiveRamp are currently trading at 29.58X and 9.12X, respectively.

P/E - F12M

Dave and Agora carry a Value Score of C. LiveRamp carries a Value Score of B.

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.

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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