DAVE Inc (NASDAQ:DAVE) Fits Louis Navellier’s Growth Investing Model with Strong Earnings Momentum and Rising Revenue

Louis Navellier’s The Little Book That Makes You Rich presents a growth investing approach built on eight core rules focused on finding stocks with strong earnings momentum, rising revenue, and solid profitability. The method highlights companies with improving earnings forecasts, regular positive surprises, growing margins, and healthy cash flow, all signs of lasting growth potential. Using these factors, investors target stocks likely to see notable price gains as their financial results exceed expectations.

One stock that fits Navellier’s model is Dave Inc (NASDAQ:DAVE), a digital banking service providing cash advances, checking accounts, and financial tools. Recent financial data indicates the company meets several of the Little Book’s key rules, making it worth considering for investors focused on growth.

How DAVE Matches the Little Book Rules

1. Improving Earnings Forecasts
   Analysts have increased DAVE’s next-quarter EPS estimates by 115.8% in the last three months, showing rising confidence in its short-term earnings. This matches Navellier’s focus on upward revisions as a sign of potential stock gains.

2. Consistent Earnings Beats
   The company has exceeded EPS estimates in each of the past four quarters, with an average surprise of 197.9%. Regular outperformance suggests management’s ability to deliver beyond conservative Wall Street estimates, a trait of strong growth stocks.

3. Rising Sales Growth
   DAVE’s revenue growth remains solid, with 39.3% year-over-year (TTM) growth and 46.7% quarter-over-quarter expansion. Faster sales growth is vital for Navellier’s approach, as it points to market demand and scalability.

4. Growing Operating Margins
   The company’s operating margin jumped 290% over the past year, showing better cost control alongside revenue growth. Expanding margins are a key sign of a company’s ability to turn sales into profits.

5. Healthy Cash Flow
   Free cash flow growth climbed 399.3% year-over-year, highlighting DAVE’s ability to produce liquidity. Navellier values cash flow strength as it allows for reinvestment or debt reduction.

6. Earnings Expansion
   DAVE’s EPS grew 266.5% year-over-year (TTM) and an impressive 1,541.7% quarter-over-quarter. Such rapid earnings growth is central to the Little Book strategy, which targets companies with accelerating profitability.

7. Strong Earnings Momentum
   The latest quarterly EPS growth (1,541.7%) far exceeded the year-ago quarter’s growth (110.1%), showing faster momentum—a key factor in Navellier’s model.

8. High Return on Equity (ROE)
   With an ROE of 26.3%, DAVE effectively generates profits from shareholder equity, outperforming many peers in the consumer finance sector. Navellier sees high ROE as a sign of competitive strength and smart capital use.

Financial Health and Valuation

ChartMill’s fundamental analysis report gives DAVE a score of 6/10, noting its solid liquidity, stability, and growth metrics. The company’s balance sheet is sound, with an Altman-Z score of 16.84 (well above bankruptcy risk levels) and a debt-to-equity ratio of 0.38, suggesting reasonable leverage. However, its valuation appears high, with a P/E ratio of 58.02, indicating investors expect future growth.

While profitability has varied in the past, recent margins (16.9% operating margin, 13.8% profit margin) show clear progress. Analysts forecast 56.7% annual EPS growth in the coming years, which may support its premium valuation if performance continues.

Finding Other Candidates

For investors looking for more stocks that fit Navellier’s growth rules, the pre-set Little Book screener provides a selected list of high-momentum options.

Disclaimer: This article is not investment advice. Conduct your own research or consult a financial advisor before making investment decisions.