Dave stock price has been one of the best-performing companies in Wall Street in the past few months. After crashing to a low of $6 in 2023, it has jumped by over 3,300%, giving it a market capitalization of over $3.3 billion. So, does Dave has more upside?
Dave stock price technical analysis
The weekly chart shows that the Dave share price has been on a rollercoaster in the past few months. It remained in a consolidation between July 2022 and early 2024. This consolidation was part of the accumulation of the Wyckoff Theory.
It then moved into the markup phase, which is characterized by substantially higher demand than supply. It remains in this range today, and the trend is gaining strength as the Average Directional Index (ADX) has jumped to 54. An ADX figure of above 20 is usually a sign that a trend is strengthening.
The Relative Strength Index (RSI) has remained above the extreme overbought level of 81. Similarly, the Stochastic Oscillator and the MACD indicators have continued soaring.
Most importantly, the stock has moved to the 50% Fibonacci Retracement level at $250, another sign that the momentum is continuing.
Therefore, the Dave stock price will likely continue rising as bulls target the next key resistance level at $300, up by 20% from the current level. A drop below the support at $200 will invalidate the bullish view.
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Why the Dave share price is surging
Dave Inc. is a fast-growing fintech company providing banking services, mostly to consumers living paycheck to paycheck. Its most popular service is known as ExtraCash, which offers a 0% interest overdraft product.
Its overdraft cost is significantly smaller than other companies. It costs about $5, much lower than the average $35 in the US. Also, the company hahas o minimum balance and has zero maintenance fees.
It also offers Dave Checking, a deposit account offered through its banking partners. It also offers personal financial management solutions like budgets and side hustles.
Dave’s growth has continued in the past few years, with its annual revenue rising from over $121 million in 2020 to over $347 million last year.
Most notably, the company has broken even, with its net loss moving from $128 million in 2022 to $48 million in 2023. It made a net profit of over $57.8 million last year.
The most recent results showed that the company’s quarterly revenue increased by 47% to $108 million, surpassing the expectations of most analysts. This growth happened as its ExtraCash origination volume soared by 46%.
Analysts are highly optimistic that the company has more room to grow. The average second-quarter revenue estimate is $112.8 million, up by 40% from last year.
The average estimate is that its revenue will grow to $468 million this year, followed by $551 million in 2026. Its management estimates that the revenue will be between $460 million and $475 million.
Dave is also expected to be more profitable. The management boosted its adjusted EBITDA from $110m and $120m to between $155m and $165m. The real EBITDA figure will likely be better than estimates because the management is often highly conservative.
Top Dave’s metrics are moving in the right direction, with the average revenue per user (ARPU) jumping by 29% in the last quarter to $171.
The main risk, however, is that Dave stock price is highly overvalued, with a forward P/E ratio of 40, much higher than the sector median of 11. Also, there is a risk that it may move into the markdown phase of the Wyckoff theory.
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The post What next for the Dave stock price after the 3,300% surge? appeared first on Invezz