Investors in identity verification technology company Clear Secure (NYSE:YOU) are certainly seeing plenty of green on the screen today. Indeed, shares of YOU stock are surging more than 25% at the time of this writing after the company reported second-quarter earnings which beat on both the top and the bottom line.
Clear Secure brought in EPS of 34 cents during the quarter, handily beating consensus expectations of only 26 cents per share. Importantly, this key metric more than doubled on a year-over-year (YOY) basis, with Clear Secure only bringing in 15 cents during the same quarter a year prior.
On the top line, the company also beat revenue estimates, albeit by a smaller margin. That said, revenue of $186.8 million was materially higher than the less than $150 million the company reported for the same quarter last year. Accordingly, there’s some strong top-line growth to consider with this company as well today.
The cherry on top was an announced expansion of the company’s share repurchase program by $100 million this past quarter. In short, this was a beat investors clearly did not expect.
YOU Stock Surges on Very Strong Earnings
What’s interesting about some of the narrative in the market right now is how many individual market participants expected to see earnings deterioration in this higher-inflation environment. Eventually, higher prices should lead to slowing growth for companies in cyclical industries. For Clear Secure, a company many consumers may have used in various airport checkpoints across the country, any sort of slowdown in travel could have negative implications for YOU stock. Of course, we haven’t yet seen any indication travel demand is slowing.
Clear Secure has underperformed other major tech stocks this year. However, this recent move has pushed YOU to a fresh 52-week high — and many investors clearly believe more upside could be in store for the firm moving forward.
An increase to Clear Secure’s share repurchase program is certainly a strong signal in this regard. Given the company’s current valuation today of around $3.5 billion, it’s possible that the company could buy up to around 3% of its overall float, improving the per-share dynamics of this stock even further moving forward.
Overall, this was a very nice beat on both the top and the bottom lines. Significant progress is clearly being made on the profitability front. Right now, that’s what most investors care most about. Accordingly, it’s no surprise to see YOU stock making its move today.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
