Clear Secure Has Much To Look Forward To, Including AMEX Partnership, Says Analyst

Needham analyst Joshua Reilly initiated coverage on Clear Secure Inc YOU with a Buy rating and a price target of $40.

• The analyst believed the company could grow its biometric identity platform well beyond its current enrollment of 14 million-plus individuals. 


• The analyst said Clear's competitive strength derived from its platform construction, backed by best-of-breed biometric capture technology and the network effects inherent in securing an unmatched footprint in 50 of the top 100 U.S. airports.


• Reilly thought the company could sustain a 25%+ revenue CAGR for the next several years while maintaining attractive unit economics in a Thursday note titled "CLEARd for Takeoff." 


• The growth forecast was supported by the company's large, immediately addressable TAM and a strong recovery already underway in travel. 


• The analyst noted travel opportunity was under-penetrated despite a snap-back in boarded passengers.


• Clear Plus membership additions were correlated to boarded passenger growth, which was 30% YTD. 


• The analyst believed Clear's partnership with American Express Company AXP had been a significant driver of member growth since inception in the third quarter of 2021 and expected the TSA PreCheck opportunity to begin ramping in early 2023.


• The analyst noted recent price increases were likely to be accretive to growth, although they could also push churn to a historically high level.


• YOU Price Action: Clear shares traded higher by 3.09% at $29.04 on the last check Thursday.