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On Friday, JMP Securities analyst reiterated a Market Outperform rating for Dave Inc (NASDAQ:DAVE), maintaining a $135.00 price target. Dave Inc recently reported its fourth-quarter earnings for the year 2024, which showcased a considerable increase in revenue and earnings per share. According to InvestingPro data, the stock has delivered an impressive 124% return over the past year, though it recently experienced a 17% decline in the past week. InvestingPro’s comprehensive analysis, including 11 additional key insights, is available for subscribers.
Dave Inc’s revenue for the quarter reached $101 million, marking a 38% year-over-year growth and a 9.1% sequential increase. This performance exceeded JMP Securities’ projections by 7%. The company’s operating expenses were reported at $79.9 million, which was $5.9 million or 6.8% lower than expected. The adjusted EBITDA stood at $33.9 million, significantly surpassing the estimated $20.3 million. InvestingPro analysis reveals the company maintains strong financial health with a robust current ratio of 8.05 and an impressive gross profit margin of 60.4%.
The GAAP diluted earnings per share (EPS) were $1.16, a substantial increase from the anticipated $0.38. JMP Securities noted that Dave Inc’s financial results were positively impacted by a one-time key vendor renegotiation. This negotiation improved the company’s non-GAAP variable margin by 1% for the fourth quarter of 2024, reaching 72%—which would have been 71% without this non-recurring benefit.
JMP Securities expressed a positive outlook on Dave Inc’s stock, citing the company’s consistent performance in exceeding expectations. The firm emphasized the stock’s potential, considering Dave Inc’s sustained top-line growth of approximately 30% over the past four years, the acceleration in capital generation, and a 25% EBITDA margin achieved in 2024. The analyst also highlighted the increasing diversification of Dave Inc’s business model as a strong point. Despite these robust results, JMP Securities believes that the current valuation, which is approximately 8 times the enterprise value to the firm’s estimated 2026 EBITDA, does not fully reflect the company’s growth prospects. InvestingPro’s Fair Value analysis suggests the stock is currently overvalued, though analyst targets range from $95 to $145, indicating potential upside. For deeper insights, investors can access the comprehensive Pro Research Report, available exclusively to subscribers, covering this and 1,400+ other top US stocks.
In other recent news, Dave Inc. reported a robust fourth-quarter performance, significantly surpassing expectations with earnings per share of $2.04, compared to a projected loss of $1.13. The company also reported revenue of $100.9 million, exceeding the anticipated $79.75 million, marking a 38% year-over-year increase. Canaccord Genuity responded to this strong performance by raising its price target for Dave Inc. to $130, maintaining a Buy rating, while Benchmark set a target of $145, also reiterating a Buy rating. These ratings reflect the analysts’ confidence in the company’s growth trajectory and operational efficiency.
The positive earnings report was attributed to an increase in ExtraCash advance originations and Dave Debit Card spending. Dave Inc. has also provided optimistic guidance for 2025, projecting revenue growth of 20-25% and adjusted EBITDA between $110 million and $120 million. The company’s management highlighted strong growth in user engagement and average revenue per user, alongside effective cost management.
Additionally, Dave Inc. announced a new strategic partnership with Coastal Community Bank, which is expected to enhance its product offerings and operational capabilities. Despite these positive developments, Dave Inc.’s stock experienced a decline, indicating mixed investor sentiment. However, the company’s strategic initiatives and strong financial results continue to garner positive attention from analysts.
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