Dave stock recently retook a closely watched moving average, but the line may be in jeopardy, once again. Thursday's pick for IBD 50 Growth Stocks To Watch has produced several quarters of triple-digit profit growth, with its next earnings report around the corner.
The artificial intelligence-based fintech name gave back early morning gains and is now retreating more than 3% after three straight winning sessions.
The IBD 50 stock is also on the IBD Leaderboard watchlist and was discussed on Wednesday's episode of IBD Live.
The fintech company is not a bank but it operates a banking app that offers cash transfers, cash advances up to $500, and checking accounts. Its app also has goal-tracking and budgeting features. In its second quarter, Dave said it added 700,000 members, increasing membership to 12.9 million.
Dave's CashAI engine is its newest AI underwriting model that analyzes cash flow and assesses credit risk. Its generative AI assistant, DaveGPT, provides its members real-time support to answer questions, set up direct deposits, and manage its cash advance accounts.
Dave ranks No. 1 out of 63 stocks in the Computer-Tech Services group, which holds the 56th spot out of the 197 industry groups that Investor's Business Daily tracks.
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Dave Stock Seeks Footing
On Tuesday, Dave stock reclaimed its 21-day exponential moving average and its 50-day moving average, but is pulling back near the lines during Thursday's reversal.
The stock can show big swings and has an average true range of around 6%, while IBD generally seeks stocks with an ATR of 5% or less. Dave stock is still working on forming a new base and has a resistance level around 250. But 245.50 and 249.90 can be seen as early entries.
Its relative strength line has been in a choppy, sideways trend after peaking in early July. Still, Dave stock has outperformed 97% of names that IBD tracks and has climbed about 146% so far this year, according to MarketSurge data.
Its IBD Accumulation/Distribution Rating of B- indicates more institutional buying than selling over the last 13 weeks.
Mutual funds have added Dave stock for eight straight quarters, according to IBD Stock Checkup. IBD Mutual Fund name Columbia Small Cap Growth Fund (CMSCX) initiated a position in Dave stock in September.
Dave's Profit Growth May Slide
Dave's bottom line has shown tremendous improvement since 2023, swinging from losses to profit. Its second-quarter earnings grew 211%, following growth of 300% in its first quarter from a year earlier.
Meanwhile, it second-quarter sales growth accelerated to 64% from 38% and 47% in the prior two quarters.
Dave, in its second-quarter earnings release on Aug. 6., raised its full-year 2025 revenue outlook to a range of $505 million to $515 million from its prior forecast of $460 million to $475 million.
Analysts call for third-quarter earnings per share of $1.82 vs. $1.51 a year ago. Its revenue growth is projected to slow to 44% in the third quarter, then slide to 14% over the following three quarters.
FactSet 2025 consensus earnings estimate forecasts $6.39 per share, and $8.94 per share in 2026. That represents a potential increase of 23% and 40%, respectively. Dave is expected to report its third-quarter earnings around early November.
Meanwhile, Dave stock holds a robust 97 IBD Composite Rating.
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