Remitly Global, Inc. (RELY) stock intrinsic value fair value estimate & owner earnings analysis

Remitly runs a digital money-transfer service. Customers in the United States, Canada and other sending countries send money to family in more than 175 countries, with India, Mexico and the Philippines the largest receiving countries. Revenue comes from transaction fees and foreign exchange spreads on each transfer. In 2025 send volume grew 37% to $74.9 billion, and revenue grew 29% to $1.64 billion. The United States produced about 66% of revenue, Canada about 10%, and the rest of the world about 24%. What we count as earnings. We start from cash generated by operations, remove one-off swings in payables, accruals and lease balances, and subtract stock-based compensation as a real cost, since Remitly paid $155 million of stock to employees in 2025 (about 9% of revenue). We also subtract only the equipment and software spending needed to keep the business running, treating a share of capital spending as growth. On that basis 2025 earnings were about $82 million, or $0.38 per share. In 2024 the figure was about negative $30 million and in 2023 about negative $104 million, so the business only recently crossed into real profit. Cash flow before 2023 is on an older reporting basis that Remitly later restated, so we do not use it. We value the business from 2025 alone, because earlier years were smaller, loss-making and heavily loaded with stock compensation, and one year is the only clean picture of the business as it now operates. This is a thin record, which is why the cases are wide and the margin-of-safety price is low. Growth. Trailing earnings growth is not meaningful (from a loss to a profit). We credit earnings growth of 10% in year one, tapering by a point a year to 1% in year ten, well below the 29% revenue growth just delivered. What is credited: revenue that has grown every year since 2019 ($127 million to $1.64 billion), and stock compensation that rose only from $137 million to $155 million between 2023 and 2025 while revenue grew 73%. What is left out: new products such as the consumer lending and receivables business, new corridors, share gains and any margin expansion beyond what is already visible. Base case: about $6.60 per share. Earnings start at $0.38, grow on that tapering path to about $0.64 in year ten, hold flat for a further ten years as repeat senders keep using the service, and then nothing further is counted. Bear case: about $1.70 per share. Here earnings drop by 40% at once, to about $0.23, through higher taxes or fees on transfers (the 1% federal excise tax on cash transfers already exists, and policy-makers have discussed extending it beyond cash and above 1%) combined with pricing pressure, hold there for five years, and then erode 10% a year for ten years. Credit losses on the growing consumer receivables book, which saw $28 million of net new lending in 2025, are also a risk here. Bull case: about $11.40 per share. Earnings growth starts at 20% and tapers by 2 points a year to 2%, reaching about $1.06 per share in year ten, with growth always below the recent 29% revenue growth. Earnings then hold flat for fifteen years. This requires spending on stock compensation and equipment to stay near current levels while volume keeps growing, which they have done for the last three years. Judgements. Depreciation, amortization, and one-off donations of stock are non-cash and are already excluded by starting from operating cash flow. No debt is deducted, since the earnings stream is already after interest. What would make this wrong: a sharper policy shift on immigrant remittances, a competitor cutting prices, or stock compensation rising faster than volume. A sustained increase in profits well beyond our tapering path would make the base case too low.