The biometric screening firm began trading yesterday on the New York Stock Exchange, surging 35% in early trading, but is the stock a buy?
Biometric screening firm, Clear (NYSE: YOU), opened its first of trading at $38.55 per share on Wednesday on the New York Stock Exchange. In early morning trading yesterday, Clear shares jumped 35% to reach a high of $41, trading under the ticker “YOU” (referring to its motto: “you are you”).
The day prior, Clear priced around 13 million of its shares at $31 apiece, slightly above its initial $27 to $30 share price range. The successful launch gave Clear a value of $4.5 billion.
Thanks to some huge names backing the company, such as Danny Meyer and the NFL, Clear gained the attention of Wall Street ahead of its market debut. These same backers helped the firm to raise $100 million back in February.
Clear’s financials
In Clear’s IPO prospectus, the firm stated that revenue fell 17% in Q1 compared to the year prior with the pandemic taking a huge hit on the company’s financials. Prior to the health emergency, Clear’s revenue jumped 20% to $230.8 million in 2020.
The biometric screening company said it currently has 5.6 million members, is in 38 airport locations, and has 26 sports and entertainment partners.
Is Clear a good investment?
Clear is one of the leaders in biometric security and is considered a disruptor in the industry. The company started out by helping travelers race through airport lines after 9/11 tightened security. With the subscription service, users who paid $179 per year were allowed to use Clear services in sports stadiums and entertainment venues.
The company pivoted to move into biometric screening for COVID-19 as travel plummeted during the pandemic. CEO of Clear, Caryn Seidman-Becker, was not surprised when travel stopped as she had been watching the virus unfold around the globe which made her realize that a fast-pass for airport security lines was not going to be the main priority.
To move with the times, Clear launched Health Pass, which allows users to pass quickly through health checkpoints. As U.S. airline passenger volumes dropped 60%, the CEO decided to cut its marketing spend, tighten the operating budget, and direct its focus to building Health Pass. This is an in-app product that keeps track of COVID-19 test results, vaccination status, and provides answers to a real-time health survey. The product has been very popular with attendees going to the Super Bowl, plus one-third of NBA teams used the app. Clear also began taking passenger temperatures at the airports to help detect coronavirus.
Clear still has growth potential, with boss Seidman-Becker saying that they could expand beyond travel to office buildings, restaurants, and more stadiums. Seidman-Becker stated:
“My hope in a few years is that aviation is our smallest vertical, because the other ones are so much bigger.”
However, she is still “incredibly bullish on travel” and is expecting a massive return for business and leisure travel.
This quick move from Seidman-Becker in building new products suggests that Clear has great leadership and has the potential to really grow into other markets.
The company is in a good position to capitalize on the growing travel sectors which are slowly inching towards pre-pandemic levels. For example, TSA in the U.S processed over 2 million travelers in four out of the last eight days.
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