Buy or Sell Clear Secure Stock?
Clear Secure (YOU) stock has fallen 11% during the past day, and is currently trading at $47.44. We believe there is not much to fear in YOU stock given its overall strong operating performance and financial condition. This is aligned with the stock’s high valuation because of which we think it is fairly priced.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Strong |
| Financial Stability | Very Strong |
| Downturn Resilience | Very Weak |
| Operating Performance | Strong |
| Stock Opinion | Fairly Priced |
No matter where YOU stock goes, your portfolio should stay on track. See how High Quality Portfolio can help you do that.
Let’s get into details of each of the assessed factors but before that, for quick background: With $4.6 Bil in market cap, Clear Secure provides a member-centric secure identity platform and a virtual queuing technology offering flexible queuing options at home or on the move in the United States.
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[1] Valuation Looks High
| YOU | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 5.1 | 3.1 |
| Price-to-Earnings Ratio | 42.3 | 23.7 |
| Price-to-Free Cash Flow Ratio | 13.5 | 19.6 |
This table highlights how YOU is valued vs broader market. For more details see: YOU Valuation Ratios
[2] Growth Is Very Strong
- Clear Secure has seen its top line grow at an average rate of 27.6% over the last 3 years
- Its revenues have grown 17% from $770 Mil to $901 Mil in the last 12 months
- Also, its quarterly revenues grew 16.7% to $241 Mil in the most recent quarter from $206 Mil a year ago.
| YOU | S&P 500 | |
|---|---|---|
| 3-Year Average | 27.6% | 5.7% |
| Latest Twelve Months* | 16.9% | 6.7% |
| Most Recent Quarter (YoY)* | 16.7% | 7.3% |
This table highlights how YOU is growing vs broader market. For more details see: YOU Revenue Comparison
[3] Profitability Appears Strong
- YOU last 12 month operating income was $186 Mil representing operating margin of 20.7%
- With cash flow margin of 41.3%, it generated nearly $372 Mil in operating cash flow over this period
- For the same period, YOU generated nearly $109 Mil in net income, suggesting net margin of about 12.1%
| YOU | S&P 500 | |
|---|---|---|
| Current Operating Margin | 20.7% | 18.6% |
| Current OCF Margin | 41.3% | 20.7% |
| Current Net Income Margin | 12.1% | 12.8% |
This table highlights how YOU profitability vs broader market. For more details see: YOU Operating Income Comparison
[4] Financial Stability Looks Very Strong
- YOU Debt was $112 Mil at the end of the most recent quarter, while its current Market Cap is $4.6 Bil. This implies Debt-to-Equity Ratio of 2.4%
- YOU Cash (including cash equivalents) makes up $700 Mil of $1.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 53.7%
| YOU | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 2.4% | 21.8% |
| Current Cash-to-Assets Ratio | 53.7% | 7.3% |
[5] Downturn Resilience Is Very Weak
YOU has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- YOU stock fell 73.4% from a high of $62.10 on 2 August 2021 to $16.51 on 30 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $54.48 on 25 March 2026 , and currently trades at $47.44
| YOU | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -73.4% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read YOU Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.