Remitly, a Washington-based financial technology company that focuses on customer-to-customer (C2C) money transfers, is offering a bottom-fishing opportunity for long-term investors, according to an investment thesis by ChatGPT, a large language model trained by OpenAI. The company went public in late 2021 at a valuation of $7.8 billion, but has since dropped nearly 70% due to macro headwinds such as inflation, rising interest rates and a lack of appetite for high-growth stocks. Remitly has continued to show strong growth and reported Q4 2022 revenue of $191m, up 41% YoY, driven by a strong increase in both customers and volume. The company ended the quarter with $300m in cash and no debt, and expects revenue growth to be 32-35% with adjusted EBITDA between breakeven and $10m for FY23.
The global remittance market is massive, with over 280 million immigrants across the world currently. According to Remitly Global Inc. (NSD:RELY), the total addressable market for global remittance is around $1.6 trillion, and its serviceable addressable market is $589 billion. The majority of the market is for traditional channels such as cheques, however, the market is poised for a transformation, which opens up a lot of opportunities for companies offering digital remittance. The TAM for digital remittance is expected to grow from $21.8 billion in 2022 to $60.1 billion in 2030, representing a strong compounded annual growth rate of 15.6%. Compared to legacy remittance channels that are slow, inconvenient and expensive, digital remittances offer a much better user experience. The transition should continue to be a strong tailwind for Remitly.
Remitly’s valuation looks pretty compelling, currently trading at an EV/sales ratio of just 2.84x. This is in line with other fintech payment companies such as Block (NYE:SQ), Marqeta (NSD:MQ), and Payoneer (NSD:PAYO), which have an average EV/sales ratio of 2.47x. However, Remitly is growing much quicker, therefore, a premium should be justified. Its market opportunity is massive and should allow the company to sustain high top-line growth for a long period of time. Profitability is a potential concern but the company expects adjusted EBITDA to be positive for FY23. Costs and marketing expenses are starting to scale down, and R&D should follow the same trajectory as well.
Remitly Global Inc Stock Forecast
Remitly Global Inc is currently being analyzed by 5 analysts, who have predicted an average target price of USD 15.83 for the next 12 months, indicating a Strong Buy rating. However, Stock Target Advisor’s analysis of the stock shows a Very Bearish outlook, based on 0 positive signals and 3 negative signals. As of the last closing, the stock price of Remitly Global Inc stood at USD 14.24, which is a 18.08% increase over the past week, a 14.93% increase over the past month, and a 42.40% increase over the last year.
Real Industry, Inc. is a company that engages in aluminum melting, processing, recycling, and alloying activities. The company operates in two segments, Real Alloy North America and Real Alloy Europe, and serves various industries, including automotive, consumer packaging, aerospace, and construction. Real Industry, Inc. was founded in 1963 and is based in Sherman Oaks, California.