20 Underperforming Stocks Targeted By Short Sellers

9. Guess Inc. (NYSE:GES)

Short interest: 16.38%

6 months’ performance: -34.57%

Guess Inc. makes apparel and accessories and sells them globally. The company’s stock is so undervalued that it has now become an M&A target! Last Thursday, a Bloomberg report suggested that Authentic Brands Global could take over the company at a price much higher than the $13 per share already offered by WHP Global. This has also increased the probability of a potential short squeeze.

The company announced its Q4 results in April and reported gross margins of 44%, down due to negative forex impact. Revenue grew at 8% in dollar terms, though a high inventory continues to cast a shadow on the management’s strategy. Going forward, the company expects revenue growth of anywhere between 3.9% and 6.2% in FY2026 as rag & bone as well as Middle East expansions start bringing in revenue.

The company’s Americas and Asia segments continue to disappoint, facing challenges like lower traffic and lower conversion rates. It will take some time for the management to deliver improvement, and going by the stock’s performance, investors do not seem to have the patience to wait for that.