Clear Secure Trades Near 52-Week High: How Should You Play the Stock?
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Clear Secure, Inc. YOU has been performing well lately, with the stock hovering at more than $34 per share in the past three trading sessions. Shares of the secure identity platform provider closed at $35.49 yesterday, near its 52-week high of $35.68.
Year to date, the stock has surged 71.8%, outpacing the S&P 500 composite and the industry’s growth of 22% and 24.9%, respectively. The company has also outperformed other industry players like Box, Inc. BOX and Palo Alto Networks, Inc. PANW, which have returned 27.8% and 26.9%, respectively, over the same time frame.
Clear Secure Outperforms Industry & S&P 500
Image Source: Zacks Investment Research
The stock is also trading above its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
YOU Shares Trade Above 50-Day and 200-Day SMA
Image Source: Zacks Investment Research
Factors Favoring the Company
The strongest driver of Clear Secure’s business at the moment is the solid growth in subscriptions to its consumer aviation service, CLEAR Plus. An increase in booking level, driven by new member enrollments, strong retention of existing members and effective pricing, is driving its sales. Exiting the second quarter of 2024, the company’s bookings totaled $197 million, reflecting an increase of 12.5% year over year. Management anticipates bookings growth to accelerate in the second half of the year, driven by positive responses from the rollout of the TSA PreCheck program.
The company’s strategic distribution partnerships with several partners including Delta Air Lines, United Airlines, Hawaiian Airlines, Alaska Airlines and American Express are promoting its services to their customers on a discounted basis. This has been enabling YOU to efficiently scale membership in CLEAR Plus. Importantly, no individual airport accounted for more than 10% of membership revenues in the second quarter, thereby reflecting the company’s core competencies and well-balanced portfolio.
Clear Secure has been also witnessing impressive growth in CLEAR Verified enrollments, which has been driving the number of total cumulative platform uses. For instance, exiting the second quarter, YOU’s total cumulative enrollments totaled 24,221,000 which represented a 39% increase on a year-over-year basis.
As part of its footprint expansion initiatives, the company is also expanding its identity and protection services to other industries. Its focus on expanding its technology platform beyond airports to other lucrative markets like health care and financial services while adding new features such as digital payments is likely to foster its growth.
The company also remains committed to increasing shareholder value through dividend payouts and share repurchases. For instance, in the first six months of the year, it paid dividends worth $17.8 million and repurchased shares of its Class A common stock for $150 million. As of June 30, 2024, $75,424 remained available under its share repurchase authorization.