Wednesday's IBD 50 Stocks To Watch pick is fintech Dave, which is rapidly approaching a buy point from a rare chart pattern, making it one of the best stocks to buy and watch right now.
Dave is a digital financial services company that develops banking applications. Its app launched in 2017 to help Americans take control of their finances, according to the company.
Dave's CashAI is a proprietary artificial intelligence underwriting model that analyzes cash flow, not credit scores, to determine members' eligibility for loans every time they need more money. Highly dynamic and personalized, CashAI analyzes more than 180 different data points, including members' income, irregular employment, bank balance, spending patterns and their history with the Dave app.
Per the company, "This transaction access gives us what we believe is an unparalleled view into customer finances not found with lagging and less comprehensive FICO indicators and enables us to
offer credit to our members within minutes of joining, helping them to avoid costly overdraft fees and payday loans found elsewhere."
Dave Swings To A Profit
In its latest quarterly results, reported on Nov. 12, the company swung to a profit of $1.51 per share from a loss of 47 cents a share in the year-ago period. Sales jumped 41% to $92.5 million. That marked an acceleration in revenue from gains of 16%, 23%, 25% and 31% the previous quarters.
"We once again exceeded growth and profitability expectations in the third quarter," said Chief Executive Jason Wilk in the press release.
Wilk continued, "Our fourth consecutive quarter of accelerating year-over-year revenue growth resulted from double-digit increases in both ARPU (average revenue per user) and monthly transacting members to quarterly records for both metrics."
For the full year, Wall Street analysts expect the company to earn $4.64 per share. In 2025. EPS is seen growing 8% to $5.02 a share, per IBD MarketSurge.
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Dave Stock At Buy Point
The stock formed a short-stroke pattern, a formation that is quite unusual. It forms over just two weeks. The first week is marked by a strong advance — 10% to 20% or even more — and usually coincides with or comes shortly after a breakout from a solid base.
The second week shows tight trading. The difference between the stock's weekly high and low is typically just a few percentage points, without hitting a new high.
On Nov. 13, Dave stock gapped up 44%, hitting a 52-week high that resulted in a 51% weekly gain. Last week, shares rose less than 8%. That places the buy point for the short stroke at 94.96.
Bullishly, the stock's relative strength line hit a new high during the recent powerful advance. That confirms shares are beating the performance of the S&P 500.
Amid powerful gains in recent years, Dave stock boasts a 97 out of a best-possible 99 Composite Rating from Investor's Business Daily, according to IBD Stock Checkup.
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Other Stocks To Keep An Eye On
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Atour Lifestyle | 29.15 | Consolidation | |
| GeneDx | 89.11 | Consolidation | |
| Rhythm Pharmaceuticals | 55.64 | Consolidation |
Source: IBD Data as of Nov. 26
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the Dow Jones Industrial Average.
