Rufus Hone Reaffirms Buy Rating on Remitly Global Amid Growth Prospects and Market Position

BMO Capital analyst Rufus Hone reiterated a Buy rating on Remitly Global (RELY – Research Report) yesterday and set a price target of $32.00.

Rufus Hone has given his Buy rating due to a combination of factors that highlight Remitly Global’s strong growth prospects and market position. Despite a recent short report from Spruce Point, Hone finds the concerns raised to be unsubstantial, particularly regarding the valuation multiples and growth levers. He disagrees with the short report’s suggestion of declining growth levers, emphasizing that Remitly’s take rate is expected to decline gradually, not expand, and that the company is well-positioned to increase market share in its existing markets.
Furthermore, Hone argues against the valuation metrics used in the short report, suggesting that Remitly’s shares should trade at a higher multiple due to expected significant EBITDA growth in the coming years. He points out that the company’s shares are trading at a reasonable price-to-earnings ratio given the projected earnings growth, indicating a strong long-term potential in the digital remittance market. Hone believes that investors are underestimating Remitly’s growth potential and EBITDA margin trajectory, reinforcing his Buy rating.

In another report released on February 24, Barclays also maintained a Buy rating on the stock with a $29.00 price target.

Based on the recent corporate insider activity of 102 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RELY in relation to earlier this year.