Remitly Stock Analysis: Immigration Policy Impact and 24% Selloff Assessment

This analysis is based on the Forbes report [1] published on November 6, 2025, which documented Remitly Global’s (RELY) dramatic 24% stock decline following Q3 2025 earnings results.

The stock’s 25.12% decline to $12.31 represents a significant market revaluation [0], reducing market cap from approximately $3.4B to $2.6B [0][1]. This severe reaction occurred despite the company reporting solid Q3 metrics:

• Revenue of $419.5M (25% YoY growth, exceeding guidance by $7M) [0]
• Adjusted EBITDA of $61.2M (15% margin, $7M above guidance midpoint) [0]
• 8.9 million quarterly active customers (21% YoY increase) [0]
• Send volume increased 35% YoY to $19.5 billion [0]

The disconnect between current performance and market reaction stems from forward guidance showing dramatic growth deceleration to ~22% Q4 2026 growth and “high teens” revenue growth for 2026 [1], representing a significant slowdown from the 24-34% quarterly growth achieved over the past year.

The core concern centers on Trump administration immigration policies affecting Remitly’s business model. The company enables consumers in the U.S. and Canada to send money to countries like Mexico and the Philippines [1], with Mexico being one of its top three destination markets [1].

• U.S. immigrant population declined for first time in 50 years [1]
• Mexico remittances fell 5.5% to $45.7B in first 9 months of 2025 [1]
• This reverses years-long growth trends in remittance flows [1]

CFO Mehta specifically cited “recent immigration headwinds” in U.S. and Canada [1], suggesting direct impact on new customer acquisition for a company whose 8.9 million active customers are predominantly immigrants [1].

While the Technology sector declined -0.88% on November 6, 2025 [0], Remitly’s 24% drop far exceeded sector movements, indicating company-specific concerns rather than broad market weakness. The stock’s elevated P/E ratio of ~178x despite growth concerns suggests valuation compression risk [1].

The immigration crackdown presents both challenges and opportunities:

• Challenge:
  Reduced immigrant population impacts customer acquisition and remittance volumes
• Opportunity:
  New 1% tax on cash remittances effective January 1, 2026, exempts digital transactions [0], potentially benefiting digital-first players like Remitly relative to traditional cash-based competitors

FT Partners analyst Gunn noted that the earnings release “leaves us with more questions than answers” [1]. The lack of specific quantification of immigration impact suggests either management uncertainty about the magnitude or additional unexplained factors affecting growth prospects.

Critical information gaps remain regarding how competitors like Western Union are being affected by the same policies, and whether Remitly’s digital-first approach provides competitive advantages in the current environment.

1. Regulatory Policy Risk:
   Immigration policies could significantly impact Remitly’s core customer base and growth trajectory. Historical patterns suggest that restrictive immigration policies typically lead to reduced remittance flows, which users should factor into their analysis.

2. Growth Deceleration Risk:
   The sharp reduction from 24-34% quarterly growth to “high teens” represents a fundamental shift in growth expectations that may persist beyond 2026.

3. Valuation Compression:
   At current levels, the stock trades at elevated multiples despite growth concerns, suggesting further downside risk if guidance proves optimistic.

1. Immigration Policy Developments:
   Track changes to U.S. and Canada immigration policies affecting customer acquisition
2. Quarterly Customer Growth:
   Monitor active customer additions versus historical trends
3. Mexico Corridor Performance:
   Specific remittance volume data to Mexico as leading indicator
4. Competitive Response:
   How traditional players adapt to the same headwinds
5. Management Clarity:
   Future earnings calls should provide more specific quantification of immigration impact

• Digital Advantage:
  New 1% tax on cash remittances benefits digital-first players [0]
• Product Innovation:
  Flex product reached 100,000+ active users and business customer send volume nearly doubled sequentially [0]
• Market Share Gains:
  Still outperforming industry in Mexico corridor despite headwinds [1]

The analysis reveals a complex situation where strong current performance contrasts sharply with concerning forward guidance tied to immigration policy impacts. While Q3 2025 results showed solid execution with 25% revenue growth to $419.5M and expanding send volumes [0], the market’s severe reaction reflects concerns about sustainable growth rates in an environment of restrictive immigration policies.

The company’s exposure to U.S. and Canada immigration flows, combined with Mexico being a top destination market, creates specific vulnerability to policy changes [1]. However, potential benefits from the upcoming digital remittance tax advantage and product innovation initiatives could provide offsetting factors [0].

The critical uncertainty centers on the magnitude and duration of immigration-related headwinds, which management has not yet quantified specifically [1]. This information gap, combined with elevated valuation multiples, explains the market’s risk-off reaction despite current operational strength.