Earnings Update: Dave Inc. (NASDAQ:DAVE) Just Reported And Analysts Are Trimming Their Forecasts

Last week, you might have seen that Dave Inc. (NASDAQ:DAVE) released its full-year result to the market. The early response was not positive, with shares down 6.3% to US$7.50 in the past week. It was an okay report, and revenues came in at US$205m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Dave after the latest results.

View our latest analysis for Dave

After the latest results, the lone analyst covering Dave are now predicting revenues of US$244.8m in 2023. If met, this would reflect a meaningful 20% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 36% to US$7.01. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$268.0m and losses of US$7.11 per share in 2023.

The analyst has cut their price target 20% to US$9.00per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Dave's revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2023 being well below the historical 27% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while Dave's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Dave's revenues are expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Even so, be aware that Dave is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.