Assessing Clear Secure’s Prospects After Airport Expansion and 15% Share Slide

• Wondering if Clear Secure is actually good value right now? You are not alone, given how quickly the airport security tech company’s story has evolved on Wall Street.
• Over the last year, shares are down nearly 15% despite a strong 12.7% gain year-to-date, hinting at changing market moods and possibly shifting investor expectations about future growth or risk.
• Clear Secure has been making headlines with new airport partnerships and digital ID initiatives, signaling further expansion into key travel markets. Recent news about the company’s plans to broaden its service offerings appears to have increased interest, even as concerns about competitive pressure and regulation still persist.
• On our value checklist, Clear Secure scores 5 out of 6, suggesting the stock looks undervalued by most traditional measures. Before you make up your mind, let’s break down the numbers behind those scores and see what alternative approaches might reveal. There may be even better ways to identify opportunity by the end of this article.

Find out why Clear Secure's -14.9% return over the last year is lagging behind its peers.

Approach 1: Clear Secure Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to today’s dollars. This approach attempts to capture both current performance and longer-term expectations, helping investors judge what the business is really worth now compared to its future earning power.

For Clear Secure, analysts estimate Free Cash Flow (FCF) of $294.87 million over the last twelve months. Forecasts show steady growth ahead, increasing to a projected FCF of $531 million by 2029. While analysts typically provide estimates up to five years out, the model extends additional years to complete a ten-year outlook.

The result of this DCF analysis is a calculated intrinsic value of $71.38 per share. At present, the stock trades at a 57.3% discount to this projected value. This suggests that Clear Secure may be meaningfully undervalued on a cash flow basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Clear Secure is undervalued by 57.3%. Track this in your watchlist or portfolio, or discover 836 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Clear Secure.

Approach 2: Clear Secure Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is a widely used valuation method for profitable companies because it connects a company’s share price directly to its earnings, offering a simple snapshot of how the market values its profitability. For companies like Clear Secure that are generating solid profits, the PE ratio can be especially meaningful.

It is worth noting that what qualifies as a “normal” or “fair” PE ratio depends on several factors, including anticipated earnings growth, profitability, and perceived risks. Companies expected to grow faster than average or with fewer risks typically command higher PE ratios. In contrast, those facing more uncertainty may deserve a discount.

Clear Secure currently trades at a PE ratio of 16.5x. For comparison, the software industry averages a much higher 34.7x, and the company’s closest peers average about 24x. On the surface, Clear Secure appears attractively valued versus many of its competitors and the wider industry. However, relying solely on these averages can be misleading, as they may not reflect the company’s specific growth profile, profitability, risk, or market size.

This is where the “Fair Ratio” calculated by Simply Wall St comes in. This proprietary figure adjusts for Clear Secure’s growth forecasts, industry context, profit margins, risk, and market cap, aiming to pinpoint a multiple most reasonable for this company in this moment. For Clear Secure, the Fair Ratio is 24x, suggesting that a fair value would be closer to the average of its peers than where it currently trades.

Because the current PE ratio (16.5x) is well below the Fair Ratio (24x), this analysis indicates that Clear Secure is undervalued on this metric, even taking its unique characteristics into account.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1411 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Clear Secure Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story behind the numbers, combining your personal perspective on Clear Secure's business potential with the financial estimates and fair value you believe are most likely. Narratives connect what you believe about the company’s future (like its opportunities in biometrics, new markets, or possible risks) to actual revenue, earnings, and margin assumptions, and then translate those into a share price you think is fair.

Unlike static models, Narratives on Simply Wall St’s Community page let you quickly and easily map your view on key drivers and see the fair value that results, helping you decide if now is the right time to buy or sell based on the gap between Fair Value and the current share price. Narratives update dynamically as new information, news, or results emerge, so you always have a valuation that reflects the latest developments.

For example, one Narrative might see Clear Secure’s international expansion and technological edge supporting a fair value as high as $46 per share. A more cautious story that emphasizes execution risks and slower growth could estimate fair value at just $20. This means you have the power to test out, share, and refine your own investment case using a flexible, crowd-powered framework. This makes your decision smarter and more transparent than ever.

For Clear Secure, we’ll make it really easy for you with previews of two leading Clear Secure Narratives:

🐂 Clear Secure Bull Case

Fair Value: $46.66

Currently trading at a 34.7% discount to narrative fair value

Revenue Growth Rate: 12.58%

• Highlights strong potential for future growth through diversification of digital identity services, especially as Clear Secure expands beyond airports and scales internationally.
• Projects rapid increase in enrollments and revenues, with operational improvements like the EnVe rollout expected to boost customer satisfaction and profitability.
• Notes significant risks including high subscription cost, market accessibility limitations, cybersecurity threats, and reputational risks as key concerns.

🐻 Clear Secure Bear Case

Fair Value: $20.05

Currently trading at a 51.9% premium to narrative fair value

Revenue Growth Rate: 1.82%

• Emphasizes Clear Secure's strong U.S. airport foothold, but warns that limited diversification, high customer acquisition costs, and privacy concerns could constrain growth.
• Foresees slower revenue and profit growth due to heavy dependence on the travel industry, vulnerable margins, and increased competition from government and private sector alternatives.
• Suggests current valuation may be too high for expected growth, cautioning that broader market risks and technological disruption could further pressure future performance.

Do you think there's more to the story for Clear Secure? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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