Clear Secure, Inc. (YOU) stock intrinsic value fair value estimate & owner earnings analysis

Clear Secure runs CLEAR, the biometric identity service best known for its dedicated airport security lanes. Almost all revenue comes from CLEAR+ subscriptions ($209 a year, family add-ons at $125, billed upfront), sold directly and through Delta, United, Alaska and Hawaiian Airlines and American Express, whose card partnership was renewed for multiple years in February 2026. Smaller lines include TSA PreCheck enrollment (launched February 2025, in 61 airports and 340 retail locations by year-end 2025), CLEAR Concierge and CLEAR1 identity services for businesses. Active CLEAR+ members grew 6% to 7.6 million in 2025, and revenue reached $900.8 million. Airport lanes operate under the federal Registered Traveler program and concession agreements that airports (and in some places airlines) can end for convenience. That dependence, and the cash flow it generates, is the heart of the business. How we measured earnings. We start from operating cash flow and remove working-capital swings, stock compensation and the capital spending needed to maintain the business. Members pay a year in advance, so rising deferred revenue ($76 million in 2025) inflates reported cash flow. We strip that timing effect out. On that basis the business lost about $112 million in 2021 and $119 million in 2022, then earned $50 million in 2023, $168 million in 2024 ($1.16 per share) and $206 million in 2025 ($1.50 per share). Two judgements matter. First, in 2024 the company booked a $90.8 million non-cash charge when it recognized its tax receivable agreement. We did not deduct it from earnings, because we subtract the whole agreement as an obligation below. Second, Clear Secure is an umbrella company over an operating partnership, and part of that partnership is owned by insiders who can swap their units one-for-one into ordinary shares. We therefore count all 135 million economic units as shares, and we deduct the cash the partnership pays those outside owners to cover their taxes (about $26 million a year). We also value the cash pile separately, so the interest it earns is left out of the earnings stream. Earnings level. The business became a different, profitable business in 2023, so the earlier loss years are left out. The median of 2024 and 2025 on the adjusted basis is about $137 million. That level has since been overtaken. Owner earnings grew 22.6% in 2025, and the first half of 2026 was much stronger: revenue rose 23% to $530.8 million, operating income rose from $80.0 million to $145.0 million, and prepaid memberships grew $56.8 million in the half compared with no growth a year earlier. Half of 2026 is already banked, so every case starts from a 2026 level set by those reported results, not from a hoped-for trend. Base case (about $27 per share). 2026 adjusted owner earnings of about $225 million. 2027 grows 8% as the prepaid-membership backlog already collected is recognized. After that, earnings stay flat through 2045. We credit no future price increases, member growth or margin gains, because none of these is secured. The flat level rests on a 15-year operating record, a network of airport concessions, the renewed American Express partnership and roughly 86% of members' spending renewing each year. From 2046 earnings fade to zero over ten years. The business is worth about $3.10 billion. The company has no borrowings: its revolving credit line was undrawn at year-end 2025. It held $959 million of cash and securities at June 30, 2026, of which we treat about $709 million as surplus after operating needs. We subtract about $160 million, the present value of the $244.7 million owed to pre-IPO holders under the tax receivable agreement. That leaves about $3.65 billion for owners, or $27.01 per share. Bear case (about $14 per share). This case is built from risks the company names itself. TSA's own PreCheck Touchless ID and other identity technology take away some of the reason to pay for CLEAR+. Spending retention, which already slipped from 88.5% to 86.4% in 2025 because price increases were smaller, keeps falling. Some airport concessions are not renewed. 2026 comes in near $200 million, then earnings fall 8% a year through 2030 to about $143 million, hold for five years and fade to zero by 2045. A shrinking member base also has to pay back part of the prepaid-membership float, so surplus cash is cut to about $549 million. The business is worth about $1.46 billion, plus $549 million of surplus cash, less $160 million owed under the tax agreement: about $1.85 billion, or $13.72 per share. There is no debt that could push this case below zero. Bull case (about $45 per share). The company's own demonstrated levers keep working. It has raised the list price by $10 a year ($189 in early 2024, $199 in early 2025, $209 in early 2026), and member growth continues at the 2025 pace of 6%. 2026 lands near $250 million, grows 12% a year through 2029 and 6% a year through 2033 as that room narrows, then holds flat to 2050 before fading. Newer lines such as PreCheck enrollment and CLEAR1 get no separate credit. The business is worth about $5.59 billion, plus $709 million of surplus cash, less $160 million: about $6.14 billion, or $45.43 per share. What would make this wrong. The biggest risk is that TSA or the airports decide that a paid identity lane is no longer needed or wanted, through Touchless ID, not renewing concessions or ending them for convenience. That would push results toward the bear case or below it. On the upside, if the 2026 margin gains hold and pricing keeps rising, the base case is conservative. We could not see the detail behind a $152 million rise in accrued liabilities in the first half of 2026. It is excluded from earnings as a timing item, and we kept $250 million of cash as an operating reserve partly for that reason. Per-share figures before 2023 rest on partnership-unit counts from annual cover pages and are approximate. The margin-of-safety price of $17 allows for the regulatory and concession risk while staying above the bear value, and assumes the shares reach the base value within a few years.