What Happened: Shares of online money transfer platform Remitly (NASDAQ:RELY) fell 22.9% in pre-market trading after the company reported first-quarter results that missed analysts’ estimates as the number of active customers fell. However, management noted that the first quarter was seasonally less active for customers and expects customer activity to improve in the second quarter. Looking ahead, the company’s full-year revenue forecast fell slightly short of Wall Street’s forecast.
On a positive note, adjusted EBITDA and earnings per share were ahead.
Overall results could have been better, especially given Remitly’s premium pricing.
The stock market overreacts to news, and big price drops can provide good buying opportunities for high-quality stocks. Is it time to buy Remitly? Find out by reading the original article on StockStory, it’s free..
What the market tells us: Remitly stock is less volatile than the market average, and has only moved above 5% 13 times in the last year. Such big changes for Remitly are very rare, which indicates to us that this news had a significant impact on the market’s perception of the business.
The biggest move we’ve written about in the past year came two months ago, when shares rose 24.5% on news that the company reported fourth-quarter results that beat Wall Street’s expectations for revenue and earnings per share. . The company also saw strong user growth, with active customers up 41% year over year and beating analysts’ expectations. Gross margins also improved significantly during the quarter. Looking ahead, full-year earnings guidance was above consensus. Zooming out, it was an impressive quarter that should please shareholders.
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Remitly shares are down 17.5% year to date, and at $15.68 per share they are trading 43.2% below their 52-week high of $27.59 from October 2023. Investors who bought $1,000 worth of Remitly shares at the September 2021 IPO will now look at an investment worth $323.63.