20 Underperforming Stocks Targeted By Short Sellers

2. Clear Secure, Inc. (NYSE:YOU)

Short interest: 20.24%

6 months’ performance: -29.91%

Clear Secure, Inc. 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%.

The company 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.