What Happened?
Shares of online money transfer platform Remitly (NASDAQ:RELY) jumped 1.3% in the morning session after Wolfe Research upgraded the stock's rating to Outperform from Peerperform.
The research firm set a price target of $25.00 for the digital payments company. The upgrade is based on Remitly's strong financial health, highlighted by a 35% year-over-year revenue growth and a solid liquidity position. Wolfe Research believes the company is well-positioned to benefit from long-term trends in digital money transfers and financial services. This positioning is expected to enable Remitly to continue capturing market share from more traditional, retail-focused providers in the sector.
After the initial pop the shares cooled down to $20.21, up 1.3% from previous close.
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What Is The Market Telling Us
Remitly’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 4.9% on the news that investor apprehension intensified ahead of a key policy speech and perplexing inflation signals clouded the economic outlook, leading to a wider market retreat from growth-oriented stocks. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure.
A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Remitly is down 9.8% since the beginning of the year, and at $20.21 per share, it is trading 25.6% below its 52-week high of $27.14 from February 2025. Investors who bought $1,000 worth of Remitly’s shares at the IPO in September 2021 would now be looking at an investment worth $417.03.
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