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Shareholders might have noticed that Dave Inc. (NASDAQ:DAVE) filed its quarterly result this time last week. The early response was not positive, with shares down 3.8% to US$4.84 in the past week. Revenues of US$59m arrived in line with expectations, although statutory losses per share were US$1.19, an impressive 31% smaller than what broker models predicted. 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Dave
After the latest results, the single analyst covering Dave are now predicting revenues of US$247.8m in 2023. If met, this would reflect a decent 12% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$6.65. Before this latest report, the consensus had been expecting revenues of US$246.7m and US$7.35 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analyst becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
Even with the lower forecast losses, the analyst lowered their valuations, with the average price target falling 8.3% to US$5.50. It looks likethe analyst has become less optimistic about the overall business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Dave's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. 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 obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Dave's future valuation.