We recently published a list of 20 Underperforming Stocks Targeted By Short Sellers. In this article, we are going to take a look at where Clear Secure, Inc. (NYSE:YOU) stands against other underperforming stocks targeted by short sellers.
Short interest refers to the percentage of publicly available shares that have been sold short. It is an indicator used by many investors to determine how strong a company’s bear thesis may be. Due to the nature of short selling, the short interest has become a popular indicator among investors.
The reason it is given so much weightage is that people betting against a stock have usually done solid research and are confident of a company’s downfall. They take unlimited risk, so when big investors or the smart money shorts a stock, people take notice. They try to unearth the red flags that may have prompted the high short interest.
We decided to dig deeper and try to find out where smart money sees trouble ahead. To come up with our list of 20 underperforming stocks targeted by short sellers, we looked at the worst-performing stocks of the last six months and then ranked them by the short interest.
A close-up of the fingers of a technician scanning an ID, verifying the Enrollment Verification process.
Clear Secure, Inc. (NYSE:YOU)
Short interest: 20.24%
6 months’ performance: -29.91%
Clear Secure, Inc. (NYSE:YOU) operates a secure identity platform mainly in the United States under the CLEAR brand name. It also provides CLEAR Plus and CLEAR mobile app as well as CLEAR1, TSA PreCheck Enrollment Provided by CLEAR, RESERVE powered by CLEAR, Sora ID, Home to Gate, and a virtual queuing technology. The stock is down 28.51% in the last 6 months, with a short interest of 20.24%.
Clear Secure, Inc. (NYSE:YOU) reported an impressive growth in Q4 2024 earnings. Revenues grew by 20.7% compared to the same period last year. With profit margins standing at 56%, the quarter ended with a remarkable 64.9% free cash flow margin.
Despite strong earnings, concerns remain around decreasing CLEAR Plus usage and member retention in case a recession occurs. Another major risk is that the company is heavily dependent on travel demand, which can drop during economic downturns. If travel demand declines, it will affect the member retention and addition negatively. Recent price increases may increase revenue, but they also pose the risk of driving away customers if they resist the price change.
Overall, YOU ranks 2nd on our list of underperforming stocks targeted by short sellers. While we acknowledge the potential of YOU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than YOU but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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