Dave: Still Overvalued With No Clear Direction
I continue to be deeply confused by the market's interest in the digital banking app Dave (NASDAQ: DAVE), which went public through a special purpose acquisition company (SPAC) and began trading independently at the very start of 2022. Since that time, the stock has gone from less than $5 to more than $15 before retreating to about $8.50 per share, giving it a $3.4 billion market cap. After releasing its earnings results for the fourth quarter of 2021 and projections for this year, I still believe Dave is incredibly overvalued at this level and doesn't really have a clear strategic direction. Here's why.
Dave offers several main products. Its flagship product, ExtraCash, enables members to access up to $250 of interest-free cash, which Dave started doing largely to help customers avoid bank overdraft fees at their main bank. Then Dave offers a personal finance tool and helps users get part-time jobs at companies in the gig economy like Lyft and DoorDash.
Dave has also rolled out a cash management account and has seen 2 million people to sign up for in the last year. Finally, along with its earnings materials, Dave announced a partnership with the cryptocurrency exchange FTX US, which will serve as Dave's partner for future crypto products. The owner of FTX US, West Realm Shires Services, also announced a $100 million investment in Dave.
Source Fool.com
