Is Remitly (RELY) a Buy Amid Uncertainty and Ambitious 2028 Targets?

The digital remittance market is undergoing a seismic shift, driven by technological innovation and a growing demand for faster, cheaper cross-border transactions. Amid this transformation, Remitly (RELY) has positioned itself as a key player with a bold vision for 2028. But with ambitious targets and a competitive landscape dominated by legacy giants like Western Union and MoneyGram, is Remitly a compelling buy for investors seeking value recovery and long-term profitability?

A Strategic Shift Toward Growth and Profitability

Remitly's recent Investor Day on December 9, 2025, outlined a clear roadmap for the next three years. The company expects 2026 revenue growth in the high teens range, with Adjusted EBITDA projected to reach $300–$320 million. By 2028, Remitly aims to achieve revenue of $2.6–$3.0 billion and Adjusted EBITDA of $575–$600 million, translating to margins of 20%–22%. These targets align with the Rule of 40 framework-a metric used to evaluate SaaS and high-growth companies-where the sum of three-year revenue CAGR and EBITDA margins should exceed 40% according to industry analysis.

The Rule of 40 is not just a benchmark but a strategic imperative for Remitly. CEO Matt Oppenheimer emphasized that innovation in financial services and business solutions will drive growth beyond core remittances. This diversification is critical, as the company seeks to monetize its expanding customer base of 8.9 million active users as reported in Q3 results.

Competitive Advantages in a Digitizing Market

Remitly's digital-first model is its most significant edge. In Q3 2025, the company reported $419.5 million in revenue, a 25% year-over-year increase, and Adjusted EBITDA of $61.2 million, up 29% year-over-year. These results highlight its ability to scale profitably, a rarity in the remittance sector.

Compared to traditional players like Western Union and MoneyGram, Remitly's fully digital platform offers faster execution and lower costs. For instance, in the U.S.-Latin America and Caribbean corridor-a key market for remittances- Remitly holds a 23% share, outpacing both incumbents. This dominance is fueled by its app-driven model, which allows users to send money instantly with minimal fees.

However, legacy operators are not standing still. Western Union's acquisition of Dash and MoneyGram's digital upgrades aim to counter Remitly's momentum according to industry reports. Yet, Remitly's agility and focus on user experience give it an edge in attracting younger, tech-savvy customers.

Valuation: A Compelling Entry Point?

Despite its growth, Remitly trades at a forward EV/EBITDA of 11x according to stock analysis, a discount to its Rule of 40-driven potential. Analysts suggest the stock is undervalued, with a narrative fair value of $21.50-32% above its current price of $14.62 as reported by financial analysts. This gap reflects both market skepticism and the company's execution risks.

The case for value recovery hinges on Remitly's ability to expand margins while maintaining growth. CFO Vikas Mehta has stressed operational discipline as a priority, a critical factor in a sector where high customer acquisition costs can erode profitability. Remitly's strong return on marketing investments-evidenced by a customer payback period under 12 months according to investor analysis-supports this strategy.

Risks and the Road Ahead

The digital remittance market is projected to grow at a 16.5% CAGR through 2032 according to market research, but competition is intensifying. Startups leveraging stablecoins and blockchain could disrupt pricing models, while regulatory scrutiny remains a concern.

For Remitly, the path to 2028 hinges on three factors:
1. Execution of its Rule of 40 targets, particularly in expanding beyond remittances.
2. Maintaining cost efficiency as it scales into new markets.
3. Navigating regulatory and competitive pressures without compromising margins.

Conclusion: A Buy for the Long-Term

Remitly's 2028 targets are ambitious but achievable, given its strong unit economics, digital leadership, and favorable market trends. While short-term volatility is likely, the company's valuation offers a margin of safety for patient investors. For those willing to bet on the digitization of remittances and Remitly's ability to execute, RELY presents a compelling case for value recovery and long-term profitability.