Analyzing Futu (NASDAQ:FUTU) and Dave (NASDAQ:DAVE)

Dave (NASDAQ:DAVE) and Futu (NASDAQ:FUTU) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Risk & Volatility

Dave has a beta of 3.9, suggesting that its share price is 290% more volatile than the S&P 500. Comparatively, Futu has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Dave and Futu, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dave	0	2	10	0	2.83
Futu	0	2	5	2	3.00

Dave presently has a consensus price target of $304.25, indicating a potential upside of 66.83%. Futu has a consensus price target of $203.67, indicating a potential upside of 25.99%. Given Dave’s higher possible upside, equities analysts clearly believe Dave is more favorable than Futu.

Valuation and Earnings

This table compares Dave and Futu”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dave	$347.10 million	7.09	$57.87 million	$10.09	18.07
Futu	$1.75 billion	12.86	$700.73 million	$8.93	18.10

Futu has higher revenue and earnings than Dave. Dave is trading at a lower price-to-earnings ratio than Futu, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dave and Futu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dave	29.85%	65.86%	41.56%
Futu	47.11%	30.59%	5.03%

Institutional & Insider Ownership

18.0% of Dave shares are held by institutional investors. 28.5% of Dave shares are held by company insiders. Comparatively, 35.2% of Futu shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Futu beats Dave on 8 of the 15 factors compared between the two stocks.

About Dave

Dave, Inc. is a digital banking service. Its products include a budgeting tool to help members manage their upcoming bills to avoid overspending, cash advances through its flagship ExtraCash product to help members avoid punitive overdraft fees, a Side Hustle product, where Dave helps connect members with supplemental work opportunities, and Dave Banking, a modern checking account experience with valuable tools for building long-term financial health. The company was founded by Jason Wilk, Paras Chitrakar, and John Wolanin in October 2015 and is headquartered in Los Angeles, CA.

About Futu

Futu Holdings Limited provides digitalized securities brokerage and wealth management product distribution service in Hong Kong and internationally. It offers online financial services, including securities and derivative trades brokerage, margin financing and fund distribution services through its Futubull and Moomoo digital platforms. The company also provides financial information and online community services; online wealth management services under the Money Plus brand name through its Futubull and moomoo platforms, which provides its client access to mutual funds, private funds, bonds, structured products, and other wealth management products; market data and information services; and NiuNiu Community, which serves as an open forum for users and clients to share insights, ask questions, and exchange ideas. Futu Holdings Limited was founded in 2007 and is headquartered in Sheung Wan, Hong Kong.