Clear Secure, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, Clear Secure, Inc. (NYSE:YOU) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 3.4% to hit US$179m. Clear Secure also reported a statutory profit of US$0.20, which was an impressive 95% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Clear Secure after the latest results.

View our latest analysis for Clear Secure

Following the latest results, Clear Secure's six analysts are now forecasting revenues of US$749.9m in 2024. This would be a solid 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to sink 12% to US$0.49 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$746.0m and earnings per share (EPS) of US$0.55 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The average price target fell 5.1% to US$23.86, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Clear Secure, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$18.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Clear Secure's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 40% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that Clear Secure is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Clear Secure's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Clear Secure going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Clear Secure that you should be aware of.

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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.