Is Remitly Global (RELY) a Buy After Its Strong Investor Day Performance?

In the ever-evolving fintech landscape, Remitly Global (RELY) has emerged as a standout player, leveraging its digital remittance platform to capture a growing share of the global money transfer market. Following its 2025 Investor Day on December 9, the company unveiled an ambitious roadmap for durable, profitable growth, setting clear financial targets and outlining strategic initiatives to expand beyond its core remittance business. This article evaluates whether RELY is a compelling buy post-investor day, focusing on its valuation attractiveness and long-term growth catalysts.

Financial Targets and Strategic Vision: A Blueprint for Growth

Remitly's 2025 Investor Day painted a clear picture of its medium-term ambitions. The company outlined revenue targets of $2.6 billion to $3.0 billion by 2028, with adjusted EBITDA projected to reach $575 million to $600 million, translating to a 20%-22% margin. These figures align with the "Rule of 40" framework, a metric used to balance growth and profitability by ensuring the sum of a company's three-year revenue CAGR and adjusted EBITDA margin exceeds 40%. For context, Remitly's 2025 results already demonstrated robust momentum: third-quarter send volume surged 35% year-over-year to $19.5 billion, while revenue grew 25% to $419.5 million. Such performance underscores the company's ability to scale its core remittance business while investing in innovation.

Central to Remitly's growth strategy is the launch of new products like Remitly One and Remitly Business, which aim to deepen customer engagement and tap into high-growth categories such as business-to-business (B2B) transactions and receiver-side services. These initiatives position Remitly to transition from a pure-play remittance provider to a broader global financial services platform. For instance, Remitly Business targets small and medium-sized enterprises (SMEs), a segment projected to grow as cross-border commerce expands. Meanwhile, Remitly One offers users access to multicurrency wallets and stablecoin functionality, enhancing retention and average revenue per user (ARPU).

Valuation Attractiveness: Undervalued or Overhyped?

Despite its strong fundamentals, RELY's stock currently trades at $13.45, significantly below its 3-month and 1-year highs. Analysts, however, remain cautiously optimistic. A "Moderate Buy" consensus rating is supported by 11 analyst ratings, including 9 "Buy" and 1 "Strong Buy". The average price target of $25.88 implies a potential 92% upside, though some analysts have recently trimmed their targets due to concerns about growth sustainability. For example, Citizens cut its price target from $23 to $20 while maintaining a "Market Outperform" rating, citing regulatory risks and competitive pressures.

Valuation models present a mixed picture. A DCF analysis by Simply Wall Street estimates a fair value of $26.50, suggesting a 35.4% undervaluation based on Remitly's projected growth trajectory. This optimism is rooted in assumptions about margin expansion and the success of new product offerings. Conversely, another DCF model places intrinsic value at $14.66, nearly matching the current price of $14.75, indicating the stock is slightly overvalued. The disparity highlights the market's uncertainty about Remitly's ability to execute on its ambitious plans.

From a traditional valuation lens, RELY's price-to-earnings (P/E) ratio is not directly comparable due to its unprofitable status, but its free cash flow yield of 7.3% and 31.3% year-to-date revenue growth suggest strong cash generation relative to its size. Additionally, the stock is trading 37% below its 3-month high and 53% below its 1-year high, creating a potential entry point for investors who believe in its long-term vision.

Long-Term Growth Catalysts: Beyond Remittances

Remitly's growth story hinges on three key catalysts:
1. Core Remittance Expansion: The global remittance market, valued at over $800 billion, is expected to grow as digital adoption accelerates in emerging markets. Remitly's low-cost, high-speed transfers and expanding partnerships with banks and mobile money providers position it to capture a larger share of this market.
2. Product Diversification: Remitly One and Remitly Business are designed to monetize user behavior beyond one-time transfers. For example, stablecoin functionality and multicurrency wallets could drive recurring revenue streams, while B2B services open access to a $10 trillion cross-border payments market.
3. Regulatory and Technological Innovation: Remitly's foray into stablecoins and blockchain-based solutions could provide a competitive edge, though regulatory scrutiny remains a risk. The company's disciplined approach to innovation-prioritizing compliance and user trust-mitigates some of these concerns.

Risks and Challenges: Execution and External Pressures

While the growth prospects are compelling, investors must weigh several risks. First, regulatory uncertainty around stablecoins and cross-border payments could delay product launches or increase compliance costs. Second, fierce competition from incumbents like Western Union and digital disruptors like Wise (TransferWise) threatens Remitly's market share. Third, execution risks persist, particularly in scaling new products like Remitly Business without diluting margins.

Conclusion: A Buy for the Patient Investor

Remitly Global's investor day reinforced its commitment to balancing growth and profitability, with a clear roadmap to achieve the Rule of 40 by 2028. While valuation models are mixed, the stock appears undervalued relative to its long-term potential, especially if the company successfully executes on its product diversification and international expansion. For patient investors who can tolerate near-term volatility and regulatory headwinds, RELY offers an attractive opportunity to participate in the fintech revolution. However, those with a shorter time horizon or risk aversion may prefer to wait for clearer execution signals before committing.