Dave (DAVE) Stock Forecast & Price Target

Dave Inc. has demonstrated a robust growth trajectory, ending the quarter with 2.6 million monthly transacting members, reflecting a 16% year-over-year increase driven by strong new member conversion and dormant member reactivation efforts. The company's financial health is further underscored by a significant increase in adjusted EBITDA margin, which rose to 38.6% from 19.0%, highlighting improved operational efficiency. Additionally, the annualized revenue per monthly transacting member surged by 42% year-over-year, increasing to $200 from $141, indicating enhanced monetization of its customer base.

Dave Inc. is facing challenges despite improvements in operating leverage, as fixed expenses as a percentage of total revenue remain concerningly high at 21% in Q1/24, which could limit profitability. Although there is a reduction in operating expenses relative to revenue, the anticipated increase in the provision for credit losses as a percentage of originations, expected to peak in Q3/25, raises further concerns regarding future financial stability. The combination of high fixed costs and potential spikes in credit loss provisions casts a shadow on the overall financial health and future growth prospects of the company.