Remitly Global, Inc. (NASDAQ:RELY) is a digital financial services company that focuses on providing international money transfer services. It aims to offer a convenient and affordable way for people to send money across borders. In the competitive landscape, Remitly faces competition from companies like Western Union, MoneyGram, and other digital payment platforms.
In evaluating Remitly's financial efficiency, its Return on Invested Capital (ROIC) is -6.91%, while its Weighted Average Cost of Capital (WACC) is 5.09%. This results in a ROIC to WACC ratio of -1.36, indicating that Remitly is not generating returns above its cost of capital. This is a concern for investors as it suggests inefficiency in capital utilization.
Comparatively, AvidXchange Holdings, Inc. (AVDX) has a ROIC of -0.28% and a WACC of 9.83%, resulting in a ROIC to WACC ratio of -0.03. Although AvidXchange's ratio is negative, it is closer to breaking even compared to Remitly. This suggests that AvidXchange is slightly more efficient in managing its capital costs.
Expensify, Inc. (EXFY) shows a positive ROIC of 1.33% against a WACC of 12.77%, leading to a ROIC to WACC ratio of 0.10. This indicates that Expensify is generating returns above its cost of capital, albeit modestly. It reflects a more favorable capital efficiency compared to Remitly.
Sterling Check Corp. (STER) stands out with a ROIC of 12.42% and a WACC of 6.10%, resulting in a ROIC to WACC ratio of 2.04. This highlights Sterling's strong ability to generate returns well above its cost of capital, making it the most efficient among the peers analyzed. Investors may find Sterling Check Corp. appealing due to its superior capital utilization.
