Clear Secure Slides 10% YTD: How Should You Approach the Stock Now?

Clear Secure, Inc. YOU shares have lost 10% year to date (YTD), underperforming the broader Zacks Computer and Technology sector’s decline of 3.7% and the Zacks Internet - Software industry’s growth of 4.8%.

YOU shares have underperformed its industry peers, including Paycom Software PAYC and Automatic Data Processing ADP. YTD, shares of Paycom Software and Automatic Data Processing have returned 25.8% and 9.6%, respectively.

The underperformance of Clear Secure’s shares can be attributed to sluggish first-quarter 2025 results. The company reported a sequential decline of 140 basis points in gross dollar retention, reflecting pushback from earlier pricing increases. Rising operating costs kept margins under pressure, with salaries and benefits climbing up 150 basis points year over year due to compensation restructuring and TSA PreCheck program expansion.

Despite these near-term pressures, Clear Secure remains strategically well-positioned. The company’s travel segment delivered strong growth in the first quarter, underscoring its strategic focus on enhancing member experience and expanding network. Continued network expansion and product innovation, including identity solutions like CLEAR1 and ePassport, are helping broaden its reach and relevance.

CLEAR Secure, Inc. Price and Consensus

CLEAR Secure, Inc. price-consensus-chart | CLEAR Secure, Inc. Quote

YOU Accelerates With Platform Growth and Product Innovation

The company is steadily advancing its mission to become the leading secure identity platform, focused on making everyday experiences safer and more seamless. In the first quarter of 2025, Clear Secure expanded its travel footprint, grew CLEAR Plus memberships by 9.1% and scaled the TSA PreCheck program. CLEAR1, its secure identity platform, has been gaining adoption across industries by reducing fraud and insider risk, reinforcing the company's growing influence in digital identity.

Clear Secure has expanded its enrollment footprint to 165 locations across airports, city centers and transit hubs, making the process more accessible and convenient for members. A key enhancement includes the launch of a passport lookup feature, allowing travelers to enroll without carrying their physical passport, a move expected to significantly boost TSA PreCheck enrollment. The company reached 31.2 million cumulative enrollments in the reported quarter, a 42.3% annual increase driven by CLEAR1 and CLEAR Plus growth.

Clear Secure continues to prioritize member convenience and security through the launch of EnVe, ePassport and eGates. These new products simplify the enrollment process and expand the platform’s functionality. With the federal REAL ID deadline approaching, the company is helping people nationwide to easily meet the new ID requirements, supporting strong demand for its services.

Further, Clear Secure’s partnership with Docusign DOCU marks a significant move into high-trust digital workflows. By embedding biometric identity verification directly into Docusign’s widely used eSignature platform, Clear Secure enhances document integrity and helps to reduce fraud at critical decision points. The partnership underscores Clear Secure’s strategy to extend its trusted identity platform beyond travel and into broader enterprise and consumer markets.

REAL ID Rollout Brings Booking Uncertainty for YOU

The implementation of the REAL ID Act, effective May 7, 2025, requires compliant identification for domestic air travel. While this change is likely to boost demand for identity verification, shifting timelines and uneven consumer adoption may lead to fluctuations in enrollments and bookings, introducing short-term variability in service uptake.

Moreover, consumer responses to the new REAL ID requirements remain unpredictable, potentially affecting the timing and volume of enrollments. Although Clear Secure’s ePassport and related solutions position it well to capitalize on increased demand, the variability in how quickly travelers comply with the mandate could cause temporary swings in revenue growth.

YOU’s Revenue & Earnings Estimates Show Mixed Trend

For the second quarter of 2025, the Zacks Consensus Estimate for earnings is pegged at 23 cents per share, down 20.7% over the past 30 days. The estimate indicates a year-over-year decline of 32.35%.

The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $214.72 million, indicating an 8.65% increase from the year-ago quarter’s reported figure.

The consensus mark for 2025 earnings is pegged at 94 cents per share, down 22.3% over the past 30 days. The estimate indicates a year-over-year decrease of 47.78%.

The Zacks Consensus Estimate for 2025 revenues is pegged at $878.42 million, indicating a year-over-year growth of 14.01%.

YOU’s Zacks Rank

Clear Secure currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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