Contactless Biometrics And Digital Travel Will Expand Markets Despite Risks

Key Takeaways

• Accelerating adoption of CLEAR's technology and expansion into premium services and biometrics position the company for outsized margin and revenue growth in multiple markets.
  
• Rising security demands and global events will drive strong recurring revenues, as CLEAR's scalable platform gains traction beyond travel into healthcare, events, and hospitality.
  
• Intensifying regulatory, technological, and competitive pressures threaten Clear Secure's core biometric business model, profitability, and long-term relevance in a rapidly evolving digital identity landscape.

Catalysts

Operates a secure identity platform under the CLEAR brand name primarily in the United States.

• Analyst consensus is positive on CLEAR's rollout of EnVe pods and NextGen identity, but this may understate the potential for network effects and operational scalability: as EnVe pod adoption accelerates, the combination of best-in-class throughput, digital onboarding, and AI-driven process automation could lead to exponential increases in member growth and drastically higher net operating margins.
  
• While analysts project incremental revenue from expanding TSA PreCheck and non-airport enrollments, they may be overlooking the potential for CLEAR's price optimization and premium Concierge services to drive much faster ARPU and membership uplift, capitalizing on a wealthier, time-sensitive customer base and pushing both revenue growth and net retention well above consensus expectations.
  
• The impending wave of digital travel and events, combined with upcoming global sporting events such as the World Cup, could make CLEAR the default fast-track solution for an expanding international traveler base, not only boosting immediate user numbers but likely leading to multi-year, high-margin recurring revenue streams as security expectations in travel permanently rise.
  
• The intensifying threat of digital and AI-driven ID fraud is expected to drive an urgent shift throughout healthcare, enterprise, and workforce markets toward trusted biometrics, positioning ClearOne as a mission-critical security layer and likely transforming B2B and government revenues from a supplemental stream into a dominant growth engine with materially higher margins.
  
• Rapid mainstreaming of contactless and biometric technology will enable CLEAR to expand from travel into stadiums, healthcare, hospitality, and digital consumer access, allowing the company to capture a significant share of large, identity-reliant markets and generate outsized top-line growth with strong operating leverage as the platform's infrastructure is already built for high scalability.

Clear Secure Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Clear Secure compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Clear Secure's revenue will grow by 10.8% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 21.2% today to 15.1% in 3 years time.
• The bullish analysts expect earnings to reach $171.7 million (and earnings per share of $1.58) by about August 2028, down from $176.9 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 47.9x on those 2028 earnings, up from 17.3x today. This future PE is greater than the current PE for the US Software industry at 37.6x.
• Analysts expect the number of shares outstanding to grow by 2.93% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.5%, as per the Simply Wall St company report.

Clear Secure Future Earnings Per Share Growth

Risks

• Rising public and regulatory scrutiny around biometric data usage and privacy could lead to tighter laws restricting Clear Secure's ability to collect and use sensitive personal information, threatening both its core business model and its long-term revenue growth.
  
• Advances in decentralized digital identity solutions, such as smartphone-based biometrics or blockchain-powered IDs, may reduce consumer demand for third-party identity verification, resulting in reduced relevancy of Clear Secure's platform and dampening future revenue prospects.
  
• Heavy reliance on airport partnerships and airline contracts leaves Clear Secure vulnerable to any loss, renegotiation, or shift in dynamics with these partners, which would cause material declines in recurring revenue and bookings if major deals are not renewed on favorable terms.
  
• Increasing competition from large technology companies or government-led digital ID initiatives could erode Clear Secure's differentiation and pricing power, putting downward pressure on net margins and overall earnings as identity verification becomes commoditized.
  
• Ongoing and escalating expenses to maintain data security, comply with evolving privacy standards, and safeguard against cyberthreats may outpace the operational leverage Clear Secure currently touts, pressuring net income and putting at risk its ability to maintain expanding operating margins over the long run.

Valuation

• The assumed bullish price target for Clear Secure is $45.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Clear Secure's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $45.0, and the most bearish reporting a price target of just $23.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.1 billion, earnings will come to $171.7 million, and it would be trading on a PE ratio of 47.9x, assuming you use a discount rate of 8.5%.
  
• Given the current share price of $31.93, the bullish analyst price target of $45.0 is 29.0% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.