Not everyone's happy to see shorter lines at airports, as these stocks are dropping

By Tomi Kilgore

Clear Secure's stock had been red-hot, but a TSA funding bill triggered a bout of profit-taking. Hertz and Avis shares were suffering a similar fate.

The previously hot stocks of Clear Secure and car-rental companies were falling Friday as nightmare waits at airports appeared set to end.

The previously red hot shares of Clear Secure, which provides an alternative to traditional security lines at airports, took a dive Friday after some progress was made to end the nightmare of hours-long waits for fliers.

With the Senate passing a bill to fund the Transportation Security Administration, and President Donald Trump pledging to pay TSA workers, the chaos at airports created by long lines at security checkpoints looked set to end soon.

While that might please travelers, Clear Secure (YOU) investors expressed disappointment. As did investors in other stocks that had gotten a boost recently as travelers looked to bypass air travel, such as those of car-rental companies Hertz Global Holdings (HTZ) and Avis Budget Group (CAR).

Although losses in those stocks were pared after the Wall Street Journal reported Friday that Republican House leaders rejected the Senate-approved bill, investors saw any movement on the government front as a sign that an end to the TSA funding impasse was near.

As of Wednesday's close, Clear Secure's stock had rocketed 62.8% since the company provided before the Feb. 25 open an upbeat earnings outlook, citing increasing demand for its secure-identity services. That outlook came just after a partial government shutdown started on Feb. 14 that stopped funding for the TSA.

On Friday, Clear's stock tumbled as much as 12% intraday, before bouncing slightly to be down 10.7% in recent afternoon trading. That put it on track for its biggest one-day selloff since a record 25.8% drop on Nov. 7, 2024.

Car-rental stocks haven't enjoyed the same gains since the TSA funding halt started, but Hertz's stock was down 3.3% in recent trading. And although Avis shares were up 0.4% at last check, they had been down as much as 5.4% intraday before the WSJ report.

On Thursday, Hertz shares had run up 9.2%, and were up 20.8% amid a four-day win streak. The company had said Thursday that search traffic to its website had increased 15% in the past week, citing the long TSA lines that disrupted air travel. And a third of Hertz's customers had said they were renting cars "specifically for road trips and driving vacations."

Avis shares climbed 13% on Thursday, and had hiked up 39.7% amid a similar four-day win streak.

Investors should keep in mind, however, that while these stocks may be hurt now by the news on TSA funding, they could get another boost when the companies report earnings in the coming weeks.

As J.P. Morgan analyst Cory Carpenter noted in a Thursday note, Clear app downloads in March were up nearly 275% from a year ago. Based on recent app-download trends, that suggests "healthy upside potential" to first-quarter earnings estimates.

Hertz is projected to report first-quarter earnings around April 23, according to FactSet, while Avis earnings are expected around May 4 and Clear Secure results are expected to be released around May 13.

-Tomi Kilgore

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03-27-26 1341ET