DAVE is still under everyone's radar. It's fast-growing, has a simple business model and I think it's very undervalued. Check out my full thesis below!
Over the last weeks I made a very similar analysis for myself on Dave as you did. I think they are undervalued. With this ebitda growth and a 2026 P/E of approx 10 it feels very cheap. I also am a big fan of the CEO after watching several interviews with him. He knows what he is doing.
Thanks for sharing your thoughts. Glad to hear you came to the same conclusion.
And agree, the CEO is one of the main reasons why I like DAVE. Lot's of skin in the game and he has built the company from scratch and wisely transitioned into the new business model.
I would argue Block’s Cash App Borrow is and will be a major competitor for Dave moving forward. I still struggle with a 5-6.5% fee for a loan with a less than 2 week duration. Better than an overdraft fee but by no means consumer friendly. I enjoyed your post.
Glad you enjoyed it. Agree, the fee isn't super consumer friendly. But its transparent and they do need to make money on these loans ha. They are not a charity foundation ☺️
Block has certain advantages over Dave, but what Dave has, in my opinion, is a laser focus on helping members reach financial stability through cash advances and related services. That focus is an advantage over companies like Block, which offer a much wider variety of products. Maybe that’s a bit naive, but I really believe in staying true to your company’s core DNA as part of your long term success as a company
I don’t think the lawsuit will eventually have a big impact on the fundamentals going forward. Most probably a one time legal expense as you state, but I don’t believe there will be a big impact on their brand. Mainly because the lawsuit is about what they did in the past. I can’t imagine it being a big thing among their type of members, who depend on Dave to pay rent or groceries. People who need a cash advance to make it to the end of the month don’t care about some legal issue related to what Dave did in the past. Thats my feeling
This is absolutley one of the most thorough DAVE analyses I've read. The way you walked through the entire transformation from the sketchy tip model to the $5 flat fee really puts everything in perspective. What stands out most to me is that CashAI system with Plaid integration keeping delinquency at 1.5 to 2.5% while competitors are struggling at 3 to 4%. That's a real competetive moat that's hard to replicate. Your valuation work is solid too. I agree the Q2 selloff was way overblown given the seasonality explanation and the adjusted delinquency rate. My main concern is still the FTC lawsuit overhang though. Even if it's just a one time legal expense, how do you think about the reputational risk if they lose? Could that scare away new users or make partnerships harder? Also curious what you think about Bob's point on Cash App Borrow as a major competetor. Block has massive distribution advantage.
Over the last weeks I made a very similar analysis for myself on Dave as you did. I think they are undervalued. With this ebitda growth and a 2026 P/E of approx 10 it feels very cheap. I also am a big fan of the CEO after watching several interviews with him. He knows what he is doing.
Thanks for sharing your thoughts. Glad to hear you came to the same conclusion.
And agree, the CEO is one of the main reasons why I like DAVE. Lot's of skin in the game and he has built the company from scratch and wisely transitioned into the new business model.
I would argue Block’s Cash App Borrow is and will be a major competitor for Dave moving forward. I still struggle with a 5-6.5% fee for a loan with a less than 2 week duration. Better than an overdraft fee but by no means consumer friendly. I enjoyed your post.
Glad you enjoyed it. Agree, the fee isn't super consumer friendly. But its transparent and they do need to make money on these loans ha. They are not a charity foundation ☺️
Block has certain advantages over Dave, but what Dave has, in my opinion, is a laser focus on helping members reach financial stability through cash advances and related services. That focus is an advantage over companies like Block, which offer a much wider variety of products. Maybe that’s a bit naive, but I really believe in staying true to your company’s core DNA as part of your long term success as a company
I don’t think the lawsuit will eventually have a big impact on the fundamentals going forward. Most probably a one time legal expense as you state, but I don’t believe there will be a big impact on their brand. Mainly because the lawsuit is about what they did in the past. I can’t imagine it being a big thing among their type of members, who depend on Dave to pay rent or groceries. People who need a cash advance to make it to the end of the month don’t care about some legal issue related to what Dave did in the past. Thats my feeling
This is absolutley one of the most thorough DAVE analyses I've read. The way you walked through the entire transformation from the sketchy tip model to the $5 flat fee really puts everything in perspective. What stands out most to me is that CashAI system with Plaid integration keeping delinquency at 1.5 to 2.5% while competitors are struggling at 3 to 4%. That's a real competetive moat that's hard to replicate. Your valuation work is solid too. I agree the Q2 selloff was way overblown given the seasonality explanation and the adjusted delinquency rate. My main concern is still the FTC lawsuit overhang though. Even if it's just a one time legal expense, how do you think about the reputational risk if they lose? Could that scare away new users or make partnerships harder? Also curious what you think about Bob's point on Cash App Borrow as a major competetor. Block has massive distribution advantage.