Clear Secure Inc - Class A (NYSE:YOU) operates in the identity verification space, offering biometric solutions for secure and efficient authentication. The company’s platform is used across airports, sports venues, and other high-traffic locations, providing a seamless experience for users.
Louis Navellier’s The Little Book That Makes You Rich outlines eight key rules for identifying high-growth stocks. These include positive earnings revisions, strong sales growth, expanding margins, and high return on equity. Clear Secure (NYSE:YOU) aligns well with several of these criteria, making it a potential candidate for growth-focused investors.
Why Clear Secure Fits the Little Book Criteria
1. Positive Earnings Revisions
Analysts have raised their EPS estimates for the next quarter by 6.45% over the past three months, signaling confidence in the company’s near-term performance.
2. Strong Earnings Surprises
Clear Secure has beaten EPS estimates in three of the last four quarters, with an average surprise of 72.08%, indicating consistent outperformance.
3. Accelerating Sales Growth
Revenue growth remains robust, with 25.56% year-over-year and 20.65% quarter-over-quarter increases. This suggests sustained demand for its identity verification services.
4. Expanding Operating Margins
The company’s operating margin has surged by 341.11% over the past year, reflecting improved cost efficiency and pricing power.
5. Strong Cash Flow Growth
Free cash flow has grown by 42.46% in the past year, providing financial flexibility for reinvestment or shareholder returns.
6. Earnings Growth
EPS has grown 208.47% year-over-year and 429.41% quarter-over-quarter, demonstrating strong profitability expansion.
7. Earnings Momentum
The latest quarterly EPS growth (429.41%) significantly outpaces the same quarter a year ago (21.43%), indicating accelerating earnings momentum.
8. High Return on Equity
Clear Secure boasts an impressive 85.54% ROE, well above industry peers, reflecting efficient use of shareholder capital.
Fundamental Analysis Overview
Clear Secure (NYSE:YOU) holds a fundamental rating of 6/10, with strengths in profitability and financial health. Key highlights include:
- High Margins: Gross margin of 85.67% and operating margin of 15.89% outperform most peers.
- Strong Growth: Revenue has grown 31.99% annually over recent years.
- Valuation: The stock trades at a P/E of 13.49, below both industry and S&P 500 averages.
For a deeper dive into the financials, see the full fundamental analysis report.
Conclusion
Clear Secure (NYSE:YOU) exhibits multiple traits favored by growth investors, including accelerating earnings, expanding margins, and strong cash flow. While past performance is encouraging, investors should assess future execution and market conditions.
For more high-growth stock ideas, explore the Little Book-inspired screener.
