Expanding Digital Identity And Biometric Verification Will Offer Mixed Prospects

Key Takeaways

• Expansion into new technologies and sectors, along with key partnerships, is driving diversified recurring revenue and operational efficiencies.
  
• Regulatory support and strategic pricing are strengthening growth, retention, and long-term profitability.
  
• Rising privacy concerns, potential government-led alternatives, market over-reliance, commoditization, and macroeconomic pressures threaten Clear Secure’s growth, margins, and long-term relevance.

Catalysts

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

• The rapid adoption and rollout of innovative technologies such as EnVe pods, NextGen Identity, and eGates are creating a much faster and more seamless airport experience that directly improves member throughput, drives higher member satisfaction, and enables operational efficiencies like serving the same volume with 30 percent fewer pods—all of which should expand net margins and support sustained earnings growth.
  
• With air travel demand hitting historical highs and projected to reach 4 million daily U.S. passengers by 2030, the addressable market for expedited identity verification is set to grow substantially, providing a multi-year tailwind for recurring revenue and driving higher member acquisition, upsell, and ARPU.
  
• Clear is rapidly expanding beyond airports into verticals such as healthcare and enterprise security, supported by marquee new partnerships and integrations (for example, with Okta and Community Health Network), setting the stage for recurring, diversified revenue streams and improved gross profit growth over the long term.
  
• Regulatory momentum and strong engagement with a pro-private sector administration are unlocking more favorable public-private partnership opportunities, including expanded PreCheck enrollments and potential end-to-end airport automation, which should result in accelerated adoption, higher enterprise contract wins, and greater pricing power—contributing to both top-line growth and improved EBITDA margins.
  
• Continuous pricing optimization—including shifting free users to paid plans, leveraging attractive bundling, and yearly price increases—combined with ongoing technology-driven improvements in customer experience and retention, equips Clear Secure to consistently grow gross dollar retention and free cash flow, thus directly boosting long-term earnings and shareholder value.

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 11.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 22.0% today to 14.3% in 3 years time.
• The bullish analysts expect earnings to reach $159.7 million (and earnings per share of $1.79) by about July 2028, down from $176.3 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 44.8x on those 2028 earnings, up from 15.7x today. This future PE is greater than the current PE for the US Software industry at 42.7x.
• Analysts expect the number of shares outstanding to decline by 0.23% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.96%, as per the Simply Wall St company report.

Clear Secure Future Earnings Per Share Growth

Risks

• The growing public backlash against biometric data collection and tightening privacy regulations could restrict how Clear Secure operates and undermine consumer trust, decreasing the company’s addressable market and limiting both user adoption and future revenue growth.
  
• The advancement of universal, government-led or tech-giant-led digital identity standards could render private solutions like Clear Secure less relevant, leading to long-term erosion of market share and a negative impact on revenue and operating margins.
  
• Clear Secure’s continued over-reliance on the U.S. airport market, with only modest traction in non-travel and international segments, exposes the business to stalled growth if domestic airport penetration plateaus or airports transition to in-house or competitive identity solutions, constraining top-line growth.
  
• Intensifying competition and commoditization of biometric identity verification—including rapid adoption of in-house or white-label solutions by airports and airlines—could erode Clear Secure’s pricing power and force it into price wars or higher innovation spending, thus pressuring net margins and profitability.
  
• Macro trends like increasing economic inequality and cost-of-living pressures may cause consumers and business partners to deprioritize paid identity or travel services, especially if free or lower-cost government alternatives emerge, directly impacting Clear Secure’s ability to sustain its revenue and earnings growth trajectory.

Valuation

• The assumed bullish price target for Clear Secure is $43.02, which represents two standard deviations above the consensus price target of $29.25. 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 $159.7 million, and it would be trading on a PE ratio of 44.8x, assuming you use a discount rate of 8.0%.
• Given the current share price of $29.85, the bullish analyst price target of $43.02 is 30.6% 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.