On Thursday, BMO (TSX:BMO) Capital maintained its Outperform rating on Remitly Global Inc (NASDAQ:RELY) with a steady price target of $24.00. The firm observed that despite a year-to-date decline of 28% in the share price, the stock is currently trading at approximately 15 times projected 2025 earnings, which is modest given an anticipated earnings per share (EPS) growth rate of over 40%.
Remitly's performance has been notable for its robust top-line growth exceeding 30% and significant improvement in EBITDA margins. Although there appears to be no immediate catalyst until the second quarter of 2024 earnings report, BMO Capital views the downturn in share value following the first quarter of 2024 as an excessive response for a company showing such strong growth metrics.
The firm anticipates that Remitly's record number of new customer additions will continue to bolster active customer growth in the near term. This trend is expected to reinforce investor confidence in the company's customer unit economics. BMO Capital suggests that the market may be undervaluing Remitly's potential for long-term growth and its EBITDA margin trajectory.
Remitly Global Inc specializes in digital financial services for immigrants and their families, providing international money transfers. Despite the current market sentiment, BMO Capital's analysis indicates a positive outlook on the company's financial health and growth prospects.
The maintained Outperform rating and price target reflect a belief in the company's continued success and potential to deliver value to its shareholders.
InvestingPro Insights
As Remitly Global Inc (NASDAQ:RELY) navigates the financial landscape, InvestingPro data and tips offer additional insights into the company's performance and stock potential. With a market capitalization of $2.64 billion, the company's strong revenue growth of nearly 40% in the last twelve months as of Q1 2024 underscores its robust top-line performance, aligning with BMO Capital's positive outlook on Remitly's growth trajectory. Despite the absence of dividends, an indicator of reinvestment in growth, the company's gross profit margin of 57.79% reflects its ability to maintain profitability on its core services.
An InvestingPro Tip highlights the stock trading near its 52-week low, which may present a buying opportunity for investors considering BMO Capital's maintained Outperform rating and $24.00 price target. Moreover, the stock's Price / Book multiple of 4.81 suggests a valuation that investors should weigh against its growth prospects. For those looking to delve deeper into Remitly's potential, InvestingPro offers additional insights with 11 more tips available, which can be accessed through the InvestingPro platform, and don't forget to use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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