You have a business that helps workers move money home faster and cheaper. You also have a chart that looks like it went down an elevator shaft. That gap is the entire trade.
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Strategic Positioning
Remitly Global Inc (NASDAQ: RELY) sits in a very specific corner of fintech.
Migrant workers and expats send part of every paycheck back home so rent, food, and school fees get covered.
For a long time, that meant standing in line at a counter, paying high fees, and hoping the cash arrived on time.
Remitly replaces the bus ride and the queue with a phone. Open the app, see what shows up on the other side, and move money in minutes instead of hours.
That core flow is person-to-person remittances, but the company is slowly turning it into more of a financial hub by adding a wallet, debit card, and tools for small businesses paying overseas contractors.
Think of it as a digital on-ramp for people who earn money in one country and support a life in another.
Recent Momentum
The stock is down more than 40% this year, but the business is not falling apart.
Revenue grew in the mid twenties year-over-year in the latest quarter, while transfer volume grew in the mid thirties as customers pushed more dollars through the rails.
Active customers are in the high single digit millions and still climbing. Profitability, once the main bear argument, has at least shown up on the scoreboard, with positive net income and a slim but real operating margin.
So why is the stock acting like something broke? The big issue is expectations. Earnings per share missed what analysts wanted and management guided to slower growth into next year. The business is still growing fast, just not at the fairy tale pace baked into the old price.
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What You Are Actually Betting On
If you buy RELY after this kind of drawdown, you are making three main calls.
First, digital remittances keep gaining share. Cash counters and legacy networks will not vanish, but more senders will prefer an app that is faster, clearer, and cheaper. That trend is already in motion.
Second, scale becomes a real edge. As volume grows, Remitly can afford lower fees, better marketing, and stronger fraud and compliance systems than smaller rivals.
Every extra billion of send volume makes those fixed costs less painful.
Third, the relationship deepens. A one off transfer is nice. A wallet, card, and business product turn Remitly into a tool you use every week, not a chore you remember once a month.
That gives the company more ways to earn from each customer and makes the platform harder to walk away from.
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Valuation Check
At around the low teens per share, Remitly has a market value under three billion dollars while revenue is heading toward roughly one and a half to two billion over the next year or so.
That is a very different setup from the early post listing phase, when investors were happy to pay a huge multiple of sales for pure story.
On simple earnings numbers, the stock still looks expensive because profits are tiny. This is one of those cases where the current price to earnings ratio is not very helpful.
The real question is whether the company can grow into a more mature payment style margin profile over the next several years.
If revenue keeps compounding in the high teens or low twenties and operating margins slowly climb into the low double digits, the earnings power a few years out could be many times what you see today.
In that world, today’s valuation would not look rich at all. If margins stall or credit losses chew through the gains, then cheap can stay cheap for a long time.
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Key Worries
There are two big clouds over the story.
The first is growth guidance. Management now talks about high teens growth rather than the hotter numbers from a couple of years ago.
That is still healthy, but it is a downshift, and the stock has been punished for it.
The second is credit risk. Features that let users send now and pay later turn Remitly from a pure fee business into something closer to a lender around the edges.
If the economy stays wobbly or some customer groups struggle, losses could climb. So far the book looks manageable, but investors are watching those lines closely.
Action Plan
If you want in, treat RELY as a spicy side position, not a core holding. One to three percent of your stock portfolio is plenty.
This is a high potential name with real risk around credit, regulation, and sentiment.
The clean approach is to build slowly. Start with a small position, then add only if the company keeps delivering double digit revenue and volume growth while credit metrics stay boring.
Let a few more quarters of results prove that the business can balance growth and risk before you size up.
Do not try to trade every headline about immigration or insider sales. Your real signals are customer counts, send volume, credit performance, and margin trends.
Final Take
Right now you have a company quietly doing important work for millions of families and a stock that most investors are tired of thinking about.
If you can live with volatility and a longer time horizon, RELY may deserve a small, patient spot in the growth sleeve of your portfolio.
Just remember what you are actually buying. Not a quick bounce, not a meme rescue, but a multi year shift from cash counters to phones.
The market has already punished the stock for every obvious risk. Your edge, if you take it, is simply being willing to wait and see whether the math wins out over the mood.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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