Shares of online money transfer platform Remitly (NASDAQ:RELY) fell 12.4% in the morning session after Wells Fargo analyst Andrew Bausch initiated coverage on the stock with an Underweight (Sell) rating and a $16 price target. Bausch's assessment highlights concerns about Remitly's ability to balance growth and margin expansion sustainably. He added, "We believe the Street may be overestimating growth within the new account/volume pipeline...and underestimating a higher level of marketing investment."
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Remitly? Access our full analysis report here, it's free.
What is the market telling us:
Remitly's shares are not very volatile than the market average and over the last year have had only 13 moves greater than 5%.
The biggest move we wrote about over the last year was 6 months ago, when the stock gained 20.2% on the news that the company reported an impressive "beat and raise" quarter. Second quarter results beat Wall Street's revenue, active users, adjusted EBITDA and earnings per share expectations. Revenue and adjusted EBITDA guidance for the next quarter and full year beat Consensus. Similarly, the company lifted the full-year guidance for both. Overall, it was a stronger quarter for the company with impressive guidance.
Remitly is down 14% since the beginning of the year, and at $16.33 per share it is trading 40.8% below its 52-week high of $27.59 from October 2023. Investors who bought $1,000 worth of Remitly's shares at the IPO in September 2021 would now be looking at an investment worth $337.15.
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