Shares of Super Micro Computer (NASDAQ:SMCI), which provides high-performance server and storage solutions, and chip giant Nvidia (NASDAQ:NVDA) are scaling new highs due to strong artificial intelligence (AI)-driven demand. SMCI stock has gained 276% year-to-date, while NVDA stock has jumped over 77%. Despite this blistering rally, these stocks have failed to keep up with the gains of Root (NASDAQ:ROOT) and Dave (NASDAQ:DAVE).
Root is an auto insurance company. Its stock has gained about 405% year-to-date. At the same time, shares of the leading neobank, Dave, are up over 308%.
While ROOT and DAVE stocks have gained substantially this year, let’s find out what the future holds for these companies.
Is ROOT Stock a Good Buy?
The rally in ROOT stock is fueled by the company’s strong financial performance throughout 2023. The company is bolstering its pricing and optimizing its expense structure to cut cash burn. Further, it has scaled its operations and is on track to deliver profitable growth and gain market share in the future.
In Q4 of 2023, Root’s total new writings were up almost fivefold, and policies-in-force jumped 55% year over year. Further, it reduced net loss by 59%, operating loss by 74%, and adjusted EBITDA loss by 99%, which is encouraging.
ROOT stock has four Buy and three Hold recommendations for a Moderate Buy consensus rating. Furthermore, as the stock has gained quite a lot, positives appear to be priced in. Analysts’ average price target on ROOT stock is 17.86, implying 66.23% downside potential over the next 12 months.
What is the Projection for Dave Inc.?
The notable growth in Dave’s stock reflects its solid financial performance. The fintech is growing members on its platform and reducing customer acquisition costs, which is encouraging. Further, the firm achieved profitability much earlier than expected, boosting its share price.
Going forward, Dave is poised to capitalize on the large and growing target market and benefit from its investments in technology platforms. Further, its affordable credit and banking services are witnessing solid demand.
While the company is performing well, Barrington analyst Gary Prestopino initiated coverage of Dave with a Hold recommendation on March 15. The analyst sees DAVE as a “premier fintech neo-bank in the U.S.” However, the analyst believes that the stock’s valuation reflects these positives. Prestopino’s price target of $26.3 implies 23.17% downside potential from current levels.
