Remitly Global (RELY) Stock Forecast & Price Target

Remitly Global Inc has demonstrated robust growth characteristics, reflected in the company's active customer growth rebound in 2Q24, which is expected to continue into 2H24, indicating a solid foundation for sustained revenue generation. The company’s ability to expand transaction expenses by approximately 10 percentage points over the past three years underscores its growing scale and investment in enhancing the customer experience, which is likely to improve customer retention and long-term growth potential. Additionally, the anticipated $296 million increase in revenue and a $51 million rise in adjusted EBITDA for FY24 signal a positive trajectory for the company's financial performance, particularly through operational efficiencies in customer support functions.

Remitly Global Inc faces significant challenges that contribute to a negative outlook, including a projected increase in non-marketing operating expenses to approximately 33% of revenue in FY24, despite a decline from FY22 levels, indicating ongoing cost pressures. Additionally, the company's gross margin expectations have been lowered for 2025 and 2026, driven by intensified pricing competition and uncertainties surrounding local regulations, which may impact revenue growth and customer acquisition strategies. Furthermore, while a reduction in marketing spend as a percentage of revenue is anticipated in FY25, persistent concerns regarding customer unit economics and the absence of GAAP profitability exacerbate investor unease about the company’s financial sustainability.