On Wednesday, Citi analyst Andrew Schmidt increased the price target on shares of Remitly (NASDAQ:RELY) Global Inc (NASDAQ: RELY) to $28 from the previous $25, while reiterating a Buy rating on the stock. Schmidt's updated financial model for Remitly Global includes slight adjustments to revenue projections, taking into account the effects of adverse foreign exchange (FX) translation.
The analyst anticipates that for the fourth quarter, Remitly will experience robust underlying growth spurred by currency volatility, which is expected to encourage beneficial send activity. Moreover, the momentum gained from cohorts acquired in the past is likely to compensate for the negative impacts of FX fluctuations.
Looking ahead to 2025, Schmidt expects a combination of slightly stronger underlying growth and increased FX headwinds. However, these factors are projected to result in marginally lower reported revenues. Despite this, the revised estimates suggest an improvement in operating leverage for the company.
The new target price of $28 reflects Schmidt's confidence in Remitly's capacity to achieve low-to-mid-twenties or higher revenue growth, along with enhanced profitability by 2025. This outlook includes the potential for the company to report positive GAAP net income, which Schmidt believes warrants a higher market multiple.
In his commentary, Schmidt stated, "Buy RELY." He emphasized Remitly's ability to deliver sustainable revenue growth and improving profitability, which are key factors underpinning the raised price target and the ongoing Buy rating.
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