Is Remitly (RELY) a Buy Following Wolfe Research's Outperform Upgrade?

The recent upgrade of Remitly Global (RELY) to “Outperform” by Wolfe Research has reignited investor interest in the digital money transfer sector. This decision, anchored in Remitly's robust financial performance and strategic agility, underscores its potential to outpace traditional players like Western Union and MoneyGram in an industry undergoing rapid transformation. To assess whether this upgrade justifies a “buy” recommendation, we must dissect Remitly's positioning within the evolving digital remittance landscape, its competitive advantages, and the macroeconomic tailwinds shaping the sector.

Remitly's Financial Resilience and Strategic Momentum

Wolfe Research's upgrade hinges on Remitly's ability to deliver consistent growth amid a challenging macroeconomic environment. The company reported a 35% year-over-year revenue increase in 2025, driven by its expanding user base and diversified service offeringsStablecoin-Powered Remittances Challenge Western Union^[1]. This growth is further supported by a strong liquidity position, enabling Remitly to invest in innovation while maintaining operational flexibilityUS Remittance Market 2025 – 2034^[3].

A critical catalyst for the upgrade is Remitly's market share expansion in the U.S., where it now accounts for 35% of app downloads in the remittance category—up from 9% pre-pandemicUS Remittance Market 2025 – 2034^[3]. This surge reflects the company's focus on user experience, low-cost transfers, and targeted product innovations, such as its membership programs and stablecoin initiativesStablecoin-Powered Remittances Challenge Western Union^[1]. By leveraging blockchain technology and digital-first strategies, Remitly has positioned itself as a disruptor in a sector historically dominated by legacy providers.

Competitive Landscape: Digital Disruption and Regulatory Challenges

The digital money transfer market is witnessing a seismic shift as fintech players and stablecoin-driven platforms challenge traditional incumbents. Western Union, despite its extensive global agent network, has struggled to keep pace, with Q1 2025 revenue declining 6% year-over-yearDigital Remittance Statistics 2025: Market Growth, Trends^[2]. Meanwhile, MoneyGram's 2024 launch of a USDC-based remittance service highlights the growing adoption of stablecoins, which now account for 26% of U.S. cross-border remittancesStablecoin-Powered Remittances Challenge Western Union^[1].

Remitly's strategic response to these trends has been twofold: technological innovation and regulatory foresight. The company's expansion to 170 countries by 2025Digital Remittance Statistics 2025: Market Growth, Trends^[2]—coupled with its emphasis on AI-driven fraud detection and compliance tools—positions it to navigate the complex regulatory environment more effectively than peers. Anti-money laundering (AML) and Know Your Customer (KYC) requirements remain significant operational hurdles, but Remitly's digital infrastructure allows for scalable compliance solutions, reducing costs compared to traditional providersDigital Remittance Statistics 2025: Market Growth, Trends^[2].

Stablecoins and the Future of Remittances

Stablecoin-powered remittances are reshaping the industry by offering near-instant settlements and lower fees. According to a 2025 report by CoinLaw, 26% of U.S. adults using cross-border remittances now prefer stablecoins, a trend that aligns with Remitly's product roadmapStablecoin-Powered Remittances Challenge Western Union^[1]. While the average cost of sending $200 remains at 4.6%—above the UN's 3% target—platforms like Remitly are closing this gap through blockchain integration and partnerships with decentralized finance (DeFi) ecosystemsDigital Remittance Statistics 2025: Market Growth, Trends^[2].

However, regulatory uncertainty persists. The U.S. remittance market, projected to grow at a 12.07% CAGR through 2034US Remittance Market 2025 – 2034^[3], faces a fragmented compliance landscape. Remitly's ability to balance innovation with regulatory compliance will be critical. Its recent diversification into stablecoins and digital assets suggests a proactive approach to mitigating these risks while capturing market share.

Risks and Considerations

Despite its strengths, Remitly faces headwinds. Macroeconomic volatility, particularly in emerging markets where remittances are most critical, could dampen transaction volumes. Additionally, while stablecoins offer efficiency, their adoption is still nascent, and regulatory pushback—such as proposed U.S. legislation to restrict unhosted wallets—could disrupt operations.

Moreover, the sector's competitive intensity is rising, with over 500 digital remittance platforms now operating globallyDigital Remittance Statistics 2025: Market Growth, Trends^[2]. Remitly's differentiation lies in its user-centric design and technological agility, but sustaining its growth will require continuous innovation.

Conclusion: A Buy for the Long-Term Visionary

Wolfe Research's upgrade to “Outperform” is well-founded, reflecting Remitly's strong financials, market share gains, and alignment with long-term trends in digital remittances. The company's strategic focus on stablecoins, AI-driven compliance, and user experience positions it to outperform traditional rivals and fintech peers alike. While regulatory and macroeconomic risks remain, Remitly's agility and diversified revenue streams mitigate downside exposure.

For investors seeking exposure to the digital remittance boom, Remitly offers a compelling case. Its $25 price target implies a 35% upside from current levels, a reward that appears justified given its trajectory. However, patience is key: the full potential of Remitly's initiatives may take 12–18 months to materialize. In a sector defined by rapid innovation, Remitly's ability to adapt and lead will determine whether this upgrade marks the beginning of a sustained bull run.