Hook & thesis
Remitly (RELY) is punching above its valuation. After management's recent investor push and the Q4 report on 02/18/2026, the stock is trading around $17.03 and reflects a market cap in the neighborhood of $3.8 billion. That price implies modest expectations: a mid-50s P/E on trailing EPS of $0.32 and a price-to-sales near 2.2 despite mid-to-high-teens revenue growth and a free cash flow profile ($283.3 million reported). For investors willing to own a growth-fintech name through a near-term volatility window, the risk/reward looks favorable for a swing trade.
Why the market should care
Remitly operates a digital-first cross-border remittance platform focused on immigrants and their families. The fundamental driver is volume and take-rate expansion as the company scales existing corridors and launches new monetized products like the Remitly One subscription and business services. Management's public roadmap contemplates growing from roughly $1.5 billion in revenue to as much as $2.6-3.0 billion by 2028 with EBITDA of $575-600 million in that same horizon - a trajectory that would materially compress current multiples if executed.
Practical levers that move the business: international expansion into higher-frequency corridors, upsell of Remitly One subscription plans, and product adjacencies for small business flows. The company also converts at the margin into free cash flow: the most recently reported free cash flow was $283.3 million, which helps underpin valuation even if margins are still maturing.
Key data points that support the buy case
- Current price: $17.03 and market cap roughly $3.8B.
- Reported EPS (trailing): $0.32 translating to a trailing P/E in the mid-50s (dataset shows ~52-55x depending on the source line).
- Price-to-sales: ~2.19x, which is reasonable for a growth fintech that can materially expand revenue toward the $2.6-3.0B goal by 2028.
- Free cash flow: $283.3M, which gives a tangible earnings floor versus pure-growth upstarts.
- Enterprise value: ~$3.20B with EV/sales near 1.96x and EV/EBITDA around 25.8x on trailing results - expensive on trailing EBITDA but cheap relative to 2028 implied numbers if guidance is reached.
- Technical momentum: the stock has moved off 10/20/50-day SMA levels (~$13.7-13.9) into the mid-teens, with an RSI around 73.7 and bullish MACD histogram signaling near-term momentum.
Valuation framing
At a market cap near $3.8B and price-to-sales of ~2.2x, Remitly looks like a company priced for steady growth but not for a transformational success. Put another way, the stock currently prices a modest level of execution risk on product rollouts and international scaling. If Remitly reaches the lower end of management's medium-term targets (roughly $2.6B revenue and $575M EBITDA by 2028), the market would be forced to re-rate multiples substantially. A back-of-envelope: $575M EBITDA at a conservative 10x multiple equals $5.75B enterprise value - leaving upside even after accounting for net cash/debt differences.
History: the shares traded as high as $27.27 (52-week high) and as low as $12.08 (52-week low), reflecting the high volatility attached to guidance misses and macro-sensitive payment flows. Today’s valuation is closer to cyclical low-end multiples for the sector on an earnings basis while still offering meaningful growth optionality.
Catalysts (2-5)
- Q4 2025 earnings readout on 02/18/2026 - results and guidance clarity can re-rate the stock if revenue/margin progression meets or beats expectations.
- Remitly One subscription adoption and metrics disclosure - stronger ARPU per subscriber would lift long-term revenue visibility.
- Geographic expansion updates - new corridors or faster conversion in higher-margin countries would feed better unit economics.
- Macro tailwinds in remittance flows (FX stability; labor migration trends) or an improvement in consumer confidence in key corridors.
Trade plan (actionable)
Trade direction: Long.
Entry: 17.03 (current market price).
Stop loss: 14.75 - a decisive break below this level would indicate failed upside momentum and risk of re-test toward the $13-$12 handle.
Target: 23.00 - this is a mid-term swing target that values the company closer to growth multiples consistent with successful execution and moderate multiple expansion.
Horizon: mid term (45 trading days). I expect the trade to play out over the next several weeks as the market digests Q4 prints, subscription metrics and any follow-up commentary on product rollouts. Momentum indicators are currently bullish, supporting a mid-term time frame, but the trade should be reviewed if price action stalls or if new guidance materially diverges from management's investor day messaging.
Position sizing & management: treat this as a directional swing with tight risk control. A full-size conviction position is appropriate only if Q4 results show upside to revenue growth or margin guidance; otherwise keep size limited and use the stop to discipline downside.
Risks and counterarguments
Every trade has a realistic bear case; here are the principal risks to owning Remitly here, followed by a counterargument that supports the buy thesis.
- Guidance disappointment. Management could provide conservative near-term guidance on revenue growth or margins if macro remittance flows slow or credit costs rise. A weak guide would likely trigger a sizable pullback given previous sensitivity in the stock.
- Credit losses and underwriting risk. Remittances can carry credit and FX exposure. If delinquencies or credit provisioning rise faster than anticipated, margins and free cash flow could compress.
- Competition and take-rate pressure. The remittance market is competitive with low switching costs. Larger incumbents or aggressive pricing by competitors could press Remitly’s take-rates and slow ARPU expansion.
- Execution on new products. Remitly One and business services are still scaling. Slow adoption or poor unit economics would undermine the path to the revenue and EBITDA targets management discussed.
- High short-volume and volatility. Recent days show elevated short activity and heavy daily short-volume prints. That can accelerate downside on bad news and create whipsaw risk into earnings.
Counterargument to the bear case
Remitly already displays tangible free cash flow ($283M) and mid-20s revenue growth in prior reports, giving the company credibility on both growth and cash generation. The current valuation (P/S ~2.2, EV/sales ~1.96) leaves room for multiple expansion if management demonstrates sustainable subscription adoption and margin improvement. Historically, the stock has re-rated quickly after credible execution -- the investor day and recent guidance framing create a binary upside catalyst that justifies a discrete, size-controlled long trade into the print.
What would change my mind
My conviction would weaken if any of the following occur: clear guidance for 2026 that implies only single-digit growth, a material rise in credit provisions that reduces free cash flow guidance, or adoption metrics for Remitly One and business services that miss materially (lower ARPU or poor retention). Conversely, conviction increases if Q4 shows accelerating revenue growth, materially improving margins, or explicit user/ARPU metrics indicating successful monetization of new products.
Conclusion
Remitly offers a pragmatic long opportunity here: a market cap near $3.8B, solid free cash flow and a valuation that prices in moderation rather than success. For traders willing to take a mid-term view through the next 45 trading days, the entry at $17.03 with a stop at $14.75 and target at $23.00 provides a favorable asymmetric setup. Execution risk and short-seller interest are real headwinds, so keep size disciplined and re-assess aggressively on the next set of quarterly disclosures.
Key monitoring checklist post-entry
- Q4 topline vs. guidance and any 2026 revenue cadence clarity.
- Subscription/adoption metrics for Remitly One and any ARPU disclosures.
- Credit loss trends and incremental provisioning.
- Daily volume and short-volume trends that could indicate structural selling pressure.