Clear Secure (YOU), mcap=$3600m

YOU short pitch:
– Airport concessionaire that expedites the security screening process – traveler identity check.
– Subscription/membership-based business model.
– Priced for perfection at 9x TTM sales.
– Limited value of the service for customers.
– Has hit a penetration wall with net-adds set to fall of a cliff in 2023.
– Majority of the growth comes from a partnership with Amex which gives the service subscription for free to Amex card holders.
– Amex membership base now seems to be close to fully penetrated.
– Amex-fueled growth obfuscates the deceleration in organic bookings growth under the hood.
– Airports/airlines are working to offer biometric screening services themselves.
– Lack of disclosure and misleading unit economics challenge management’s credibility.

YOU valuation:
– Trades at 9x TTM revenues with growth about to come to a halt.
– Applying 15x to FY25e Adj. EBITDA of $110m gives a 51% downside to the stock price.

Exp. gain:

Full write-up (free guest account required):