Robinhood just added another IPO stock to its new IPO Access program: the app will let users buy Clear Secure stock at the IPO price of $31.
The last IPO stock on Robinhood proved more than a gimmick . Figs Inc. (NYSE: FIGS) soared 113% from $22 to $47. Clearly, this is a real opportunity for retail investors to profit from IPOs.
This is your next opportunity. Clear Secure will go public at just the right time.
This company provides technology to speed up airport security processes. And crowded airports will soon demonstrate the need for its products this post-pandemic summer.
Clear Secure filed with the U.S. Securities and Exchange Commission on Monday, June 7. The company will trade under the stock ticker “YOU.”
The Clear Secure IPO could see a valuation of $2.2 billion, raising over $400 million in the IPO on 13.2 million shares.
Goldman Sachs Group Inc. (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM), and Wells Fargo & Co. (NYSE: WFC) will lead the underwriting process of this IPO.
Opportunities to invest in IPO stocks are still few and far between for retail investors. Let's talk about whether Clear Secure stock is an undeniable buy opportunity, or if you should wait...
What Is Clear Secure?
Clear Secure Inc. provides biometric technology to validate identity. In other words, it can determine who you are by an iris or facial scan.
The company launched in 2010 directly in response to new needs that arose after September 11, 2001. Airspace authorities wanted security to clamp down, but they did not want it to slow down.
Clear Secure Inc. has since provided a system that enables flyers to register their face and iris scans in its database to be scanned at participating locations.
It does this through a service called CLEAR Plus, a subscription and mobile app that helps flight customers bypass long lines. The vision is for a completely "touchless" airport experience, no need to ruffle through a purse for your ID.
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Not only does Clear Secure have the right business for the post-9/11 era, but customers will find touchless experience more valuable post-pandemic as well.
Even further in the future, this sort of technology could be implemented in places beyond airports for security purposes. Kiosks could be placed outside sports venues and concerts. Any event requiring proof of identification could benefit from this technology.
This may not show in Clear Secure's bottom line immediately, but it will within the next few years...
Is Clear Secure Profitable?
Clear Secure is not profitable yet. But its revenue is rapidly increasing.
Its latest financials showed a net loss of $10.8 for 2020, up from a loss of $192 million in 2019.
That revenue figure was on top of a solid $230 million in revenue. Because the company offers a subscription service and is still relatively new to your average flyer, it has plenty of growth potential as it gets adopted in the years to come.
A total of 61 million users have subscribed to the platform so far.
Additionally, partnerships with airports and government agencies will also fuel Clear Secure's top line. Today, its technology can be found at 38 airports and 26 sports and entertainment venues in America.
As far as venues, the company is partnered with the Los Angeles Football Club, the Detroit Tigers, Little Caesar's Arena, and more.
The U.S. Department of Homeland Security also gave Clear Secure's information security program its highest anti-terrorism technology certification.
This is technology approved by the private and public sectors, and it will catch steam with the American public when they find out.
But does that make Clear Secure stock a buy through Robinhood's IPO Access program?
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Is Clear Secure Stock a Buy?
Robinhood has not exactly unleashed a flood of IPO stocks on its platform since IPO Access was unveiled. This is only the second stock Robinhood traders have had an opportunity to buy at the IPO price.
Beggars can't be choosers. But the options we've had so far have been great, Clear Secure included. Before, we had the Figs IPO, which is up from $30 to $46 since it started trading.
Its initial IPO price was $22, which shows the potential value of investing pre-IPO.
We saw that Figs had some fundamentals making it a good buy opportunity. Quality medical scrubs make a great post-pandemic stock.
Likewise, Clear Secure appears to be going public at the right time. You could make the post-pandemic case, the airport security case, or the futuristic smart city case for why this stock has growth ahead.
The only question, then, is when to buy.
Robinhood is giving retail investors an early crack at the stock. But here's where that gets tricky...
IPOs tend to soar on early hype for shares and crash quickly after. The Robinhood trading world could increase that volatility tenfold.
Robinhood traders have pumped up meme stocks like AMC and GameStop in the last year. The same thing has the potential to happen with these IPOs, making IPO investing just a little riskier than before.
The stock can potentially rise even higher out the gate, then crash even lower after the fact before finding level ground.
Of course, this could happen to any stock at any moment - this uncertainty defines the "meme stock" trend. And it's more likely to happen as stocks like these make headlines.
But just like Figs, this stock has the fundamentals to carry it far into the future. Just mind the risk as you go to buy.
The airport security industry really is poised to take off and this is a solid play on the trend.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.