Dave Inc. (DAVE): A Bull Case Theory

We came across a bullish thesis on Dave Inc. (DAVE) on Substack by Next 100 Baggers. In this article, we will summarize the bulls’ thesis on DAVE. Dave Inc. (DAVE)’s share was trading at $193.70 as of 21st May. DAVE’s trailing and forward P/E were 54.41 and 22.73 respectively according to Yahoo Finance.

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Dave Inc. (DAVE), a neobank fintech, is carving out a significant niche by addressing the financial needs of over 100 million underserved Americans living paycheck-to-paycheck. Through its mobile app, Dave offers instant “ExtraCash” advances up to $500, spending accounts, and side gig discovery tools. With 2.5 million monthly transacting members and over 10 million users historically, Dave operates in a large and underpenetrated market.

The company’s pivot to a revised fee model in late 2024 has improved monetization without hurting user retention, and revenue per user is climbing. Backed by strong unit economics, Dave’s Q1 2025 saw 47% revenue growth YoY, a 77% variable profit margin, and improved operating leverage. CEO Jason Wilk and insiders, holding 21% of shares, remain aligned with shareholder interests and have demonstrated confidence through share repurchases.

The company is now free cash flow positive with $90M in cash and manageable debt, supporting a $50M buyback program. While competition is fierce from banks and other neobanks, Dave’s AI-driven underwriting (CashAI) has kept delinquency rates low, giving it an edge. Regulatory risks remain, particularly a DOJ lawsuit over past fee practices, but the company has made compliance-driven changes. Trading at 23x forward earnings and 5.8% FCF yield, Dave’s valuation remains attractive given its 30%+ growth and rising profitability. With a favorable risk/reward skew, continued ARPU expansion, and new growth avenues such as larger loans or partnerships, the stock could see significant upside. Even if growth moderates, current execution suggests strong durability and long-term shareholder value creation.

Dave Inc. (DAVE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held DAVE at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of DAVE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAVE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.