We’ve recently curated a list of the 20 Underperforming Stocks Targeted by Short Sellers, and today, we’re focusing our analysis on Clear Secure, Inc. (NYSE: YOU). Understanding where YOU stands among other stocks facing short-selling pressure can provide valuable insights for potential investors.
Understanding Short Interest
Short interest refers to the percentage of publicly available shares that have been sold short and is a critical metric for investors. It serves as an indicator of market sentiment regarding a company’s prospects. A high short interest often signals that investors think the stock price will decline, making it a crucial gauge of a company’s bear thesis.
The significance of short interest lies in the meticulous research typically conducted by those betting against a stock. These investors are willing to take unlimited risks, indicating strong confidence in their analysis. When respected investors short a stock, it prompts the rest of the market to look for underlying red flags that could justify this bearish sentiment.
In our commitment to delivering exclusive insights, we’ve delved deeper into the market currents to uncover which companies are under the financial spotlight. Our list of the 20 underperforming stocks was compiled by identifying the worst performers over the last six months and ranking them based on their short interest levels.
Key Metrics:
Short Interest: 20.24%
6-Month Performance: -29.91%
Clear Secure, Inc. (NYSE: YOU) operates a secure identity platform primarily in the United States under the CLEAR brand name. The company offers various services, including the CLEAR Plus membership, a mobile app, and TSA PreCheck Enrollment, among others. Despite witnessing a 28.51% decline in stock price over the last six months, it reported impressive growth in its Q4 2024 earnings, boasting a 20.7% increase in revenues compared to the previous year. Moreover, its profit margins stand at an impressive 56%, with free cash flow margins reaching 64.9% during the quarter.
Yet, several concerns loom over the company. The usage of the CLEAR Plus service has seen a downward trend, alongside worries about member retention, especially if a recession occurs. Clear Secure also faces significant risk owing to its heavy reliance on travel demand, which can falter during economic downturns. While recent price increases may boost revenue, they also have the potential to deter customers resistant to such changes.
Ultimately, YOU ranks 2nd on our list of underperforming stocks targeted by short sellers. While there are promising aspects to YOU as an investment, we believe that certain AI stocks present a greater opportunity for higher returns within a shorter time frame. For instance, there’s an AI stock that has surged since the start of 2025, unlike popular alternatives that have faced a 25% decline. If you’re seeking a more promising AI investment trading under 5 times its earnings, don’t miss our detailed report on the cheapest AI stock available!