Dave Inc. (NASDAQ:DAVE) Financial Analysis: A Deep Dive into ROIC and WACC

• Dave Inc.'s (NASDAQ:DAVE) ROIC is -24.93%, indicating inefficiency in capital utilization compared to its peers.
• Nathan's Famous, Inc. (NATH) and Society Pass Incorporated (SOPA) demonstrate strong capital efficiency with high ROIC to WACC ratios, suggesting effective use of capital to generate returns.
• Forge Global Holdings, Inc. (FRGE) shares similar capital utilization challenges with Dave Inc., highlighting a sector-wide issue for certain companies.

Dave Inc. (NASDAQ:DAVE) is a financial technology company that offers banking services and financial tools aimed at helping consumers manage their finances. The company provides features such as budgeting tools, cash advances, and credit-building services. In the competitive landscape, Dave Inc. faces competition from other fintech companies and traditional banks that offer similar financial services.

In analyzing Dave Inc.'s financial performance, the focus is on its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC). Dave's ROIC is -24.93%, while its WACC is 20.20%. This results in a ROIC to WACC ratio of -1.23, indicating that the company is not generating enough returns to cover its cost of capital. This inefficiency in capital utilization is a red flag for investors.

Comparing Dave Inc. to its peers, Nathan's Famous, Inc. (NATH) shows a strong performance with a ROIC of 68.04% and a WACC of 5.47%, resulting in a ROIC to WACC ratio of 12.44. This suggests that Nathan's is effectively using its capital to generate returns well above its cost of capital. Similarly, Society Pass Incorporated (SOPA) stands out with a remarkable ROIC of 635.98% and a WACC of 12.05%, leading to a ROIC to WACC ratio of 52.76, highlighting its efficient capital utilization.

On the other hand, Ark Restaurants Corp. (ARKR) and Good Times Restaurants Inc. (GTIM) have modest ROIC to WACC ratios of 0.11 and 0.43, respectively. These figures indicate that while they are generating returns above their cost of capital, the margin is not as significant as that of Nathan's or SOPA. Forge Global Holdings, Inc. (FRGE) shares a similar challenge with Dave Inc., with a negative ROIC of -33.60% and a WACC of 13.84%, resulting in a ROIC to WACC ratio of -2.43, indicating inefficiencies in capital utilization.

Overall, the comparison highlights the challenges Dave Inc. faces in generating sufficient returns on its invested capital. In contrast, Society Pass Incorporated demonstrates exceptional capital efficiency, making it a standout among its peers. Investors may find SOPA's strong ROIC to WACC ratio appealing, suggesting potential growth and efficient capital management.