Mark Cuban is known for early investments in little-known stocks that can quickly enter powerful growth trends, such as Dave, which cleared a buy point last week. Now shares have pulled back and hover just below the buy point, but Dave stock is Tuesday's pick for IBD 50 Stocks To Watch.
Shares rose after the company announced preliminary results on Nov. 5 and gapped up on Nov. 13 amid a six-day winning streak. The company reported accelerating sales and earnings growth in the September quarter, with sales up 41% to $92.5 million and earnings reversing to a gain of $1.51 a share after a loss of 47 cents the prior year.
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Sales accelerated for the fourth continuous quarter as average revenue per user and monthly transacting users — key metrics for sales — grew in double digits in the third quarter. Total monthly transacting users grew to 2.4 billion, a 23% increase from the prior year.
Its short-term credit feature called ExtraCash also hit a record of $1.4 billion in origination volume. Both the average size and total number of ExtraCash transactions increased. On average, the company made $9.7 per origination during the quarter.
The company raised its full-year midpoint sales outlook to $342 million from $318 million. Analysts are bullish on its profitability for the entire year and see earnings hitting $3.66 per share in 2024, a 253% spike.
Dave Stock Holds Impressive Ratings
Dave provides banking and credit services. Shares listed on the Nasdaq in January 2022.
The stock holds a Composite Rating of 97 and an EPS Rating of 81. The Relative Strength Rating stands at a best-possible 99.
Shares hold a buy point of 108.50 from a first-stage consolidation base. Though the stock is thinly traded, its dollar volume — which multiples the average daily trading volume with the share price — exceeds $45 million and makes the stock highly liquid.
Dave stock holds second place in the computer tech services group, according to IBD Stock Checkup. The group also holds a high ranking, placing 25th amid Investor's Business Daily's 197 industry groups, according to IBD MarketSurge.
Mutual funds own 61% of outstanding shares. More funds have been net buyers of the stock for the past seven quarters. Mutual funds have also been adding shares in the last 13 weeks, giving the stock an Accumulation/Distribution Rating of B-.
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