Pre-earnings brief
Reports
Mon, Mar 2, 2020
Est. EPS
—
Est. revenue
—
Implied move
±4.3%
EPS beat rate
100%
Dave Inc. is a consumer finance company that aims to help individuals manage their finances more effectively. Operating within the financial sector, it focuses on providing budgeting tools and financial products that cater to everyday consumers, making it relevant in today's economy where personal finance management is increasingly important.
Last quarter
In the last quarter, Dave Inc. reported an EPS of $4.12, significantly exceeding estimates and showcasing strong profitability. However, revenue figures were not disclosed, leaving some uncertainty about overall performance.
Management promises and guidance
EPS beat streak
8Q
EPS beat rate
100%
Avg EPS surprise
+1407.94%
Avg 1-day reaction
+2.44%
Overall, investors are cautiously optimistic about Dave Inc.'s upcoming earnings report, especially given the company's strong EPS history. However, the lack of revenue guidance raises questions about sustainability.
Bull case
If Dave Inc. continues its trend of beating EPS estimates and shows strong revenue growth, it could signal robust demand for its services and lead to a positive stock reaction.
Bear case
Conversely, if the company fails to meet expectations or provides weak guidance, it could lead to a decline in investor confidence and a negative stock response.
The print will turn on these.
Q1
What will the EPS be for this quarter?
Given the company's history of exceeding EPS estimates, this number will be critical in determining market reaction.
Q2
How many new customers were acquired this quarter?
Customer acquisition is vital for growth, and any significant changes in this metric could impact investor sentiment.
—
Est. EPS
—
Est. Rev
—
Impl. Move
—
Why consensus could be wrong
The Street may be underestimating the potential for Dave Inc. to exceed EPS expectations again, given its strong track record and innovative product offerings.
Supporting evidence
The company has consistently beaten EPS estimates in the past, suggesting a trend that could continue.
Options pricing indicates a relatively low expected move, which may not reflect the company's potential for a significant surprise.
Key risk
If customer acquisition rates show significant improvement, it could challenge current market expectations.
Pre-commit to what would confirm each case.
The market is debating whether Dave Inc. can sustain its impressive EPS growth amidst potential revenue challenges.
Bull confirmed if
An EPS of $4.50 or higher would confirm the bull case, indicating strong profitability.
Bear confirmed if
An EPS below $3.50 would confirm the bear case, raising concerns about the company's financial health.
What the market is pricing for the move.
Implied Move
±4.3%
Historical Avg
±10.3%
The options market is pricing in a move of about 4.3%, suggesting that traders expect some volatility around the earnings announcement.
Options are pricing ±4.3% while DAVE has averaged ±10.3% over the last 8 prints — setup is pricing cheap.
ATM IV
0.7%
30d HV
66.9%
Cross-company pattern from 30 similar setups.
Prior-quarter beat + options pricing cheap in Financials
Fade rate: 14 of 30 (47%)
This setup has occurred 30 times across Financials in the last 2 years. 14 of 30 faded and 16 held — no strong directional bias after the initial reaction. The average absolute 1-day move is 5.0%, with a raw directional average of +1.5% (modestly positive historical bias).
Likely market behavior by outcome. Not investment advice.
Beat & raise
If Dave Inc. beats expectations, history suggests a positive stock reaction of around +2.44%, confirming strong demand for its offerings.
In line / cautious
A cautious inline report could lead to muted market reaction as investors digest the implications of the results.
Miss
Should the company miss expectations, the average historical reaction suggests a decline of around -5.50%, which could shake investor confidence.
The lines on the call that would change the story.