Dave (NASDAQ: DAVE) stock surged 13% on Monday morning after JMP Securities initiated coverage of the neobank and fintech company with a Market Outperform rating. Analyst Devin Ryan highlighted the compelling valuation of the company, despite its impressive 421% increase in share price so far this year. Even though the stock is still down about 85% from its early 2022 SPAC close, Ryan believes there is still significant potential for growth ahead.
Ryan pointed to the improving fundamental story of Dave, with positive cash generation on the rise. This, along with potential catalysts such as a broader recovery in FinTech sentiment and increased liquidity in the stock, could drive further valuation increases. The analyst also mentioned that Dave is expected to be added to the Russell 2000 index during the 2024 rebalance, which could attract more investors to the stock.
While Ryan’s Market Outperform rating differs from the Hold rating given by the SA Quant system, it aligns with the average sell-side analyst rating of Buy. Overall, the outlook for Dave stock looks positive, with potential for continued growth in the future.