Zombie Stocks List

Stocks you should eliminate from your portfolio!

We started our Zombie Stock list in June 2022 and have added a total of 33 stocks to the list. Post this report, 23 stocks remain on the list. As rising rates drive up the cost of capital and force investors to become more discerning, many Zombie Stocks have fallen precipitously.

As a reminder, to make the Zombie Stock list, companies must:

  1. have less than 24 months of cash to sustain their high Free Cash Flow burn,
  2. have a negative interest coverage ratio (EBIT/Interest expense), and
  3. be a Danger Zone stock.

See the end of this report for performance details on all of the Zombie Stocks.

The Full Zombie Stock List

23 stocks remain on the Zombie Stock list. These stocks have a real risk of going to $0/share, especially as markets adjust to a “higher for longer” interest rate environment that will challenge many of these companies.

Figure 1 shows all 33 Zombie Stocks. We mark those that have been removed from the list with an asterisk.

Figure 1: Zombie Stock Reports: Performance Since Publish Date Through 7/1/24

Company Name Ticker Date Added Return Since Add Date Return as Short Vs. S&P 500
Freshpet Inc.* FRPT 6/23/22 -16% 9%
Peloton Interactive PTON 6/23/22 -70% 110%
Carvana Co. CVNA 6/23/22 295% -255%
Snap Inc. SNAP 7/22/22 61% -23%
Beyond Meat, Inc. BYND 8/1/22 -60% 94%
Rivian Automotive* RIVN 8/8/22 -62% 95%
DoorDash, Inc. DASH 8/10/22 39% -9%
Shake Shack, Inc. SHAK 8/10/22 67% -37%
AMC Entertainment AMC 8/15/22 -98% 125%
GameStop Corporation* GME 8/15/22 -68% 69%
Chewy Inc.* CHWY 8/17/22 -55% 57%
Uber Technologies UBER 8/17/22 136% -108%
Robinhood Markets HOOD 8/22/22 148% -116%
Tilray Brands TLRY 9/7/22 -51% 85%
Affirm AFRM 9/19/22 35% 7%
Sunrun RUN 9/21/22 -65% 113%
Blue Apron * APRN 9/26/22 -79% 95%
RingCentral RNG 10/3/22 -31% 75%
Allbirds Inc.* BIRD 10/17/22 -71% 89%
Wayfair W 11/14/22 20% 17%
Atlassian*  TEAM 11/16/22 43% -32%
Bill.com BILL 11/16/22 -55% 94%
Okta OKTA 11/16/22 93% -54%
Oatly* OTLY 11/21/22 -62% 71%
Twilio TWLO 11/23/22 17% 19%
Ceridian* CDAY 11/23/22 -3% 11%
Redfin RDFN 11/30/22 6% 28%
Five9 Inc. FIVN 12/5/22 -32% 71%
Opendoor OPEN 1/30/23 -18% 53%
Compass Inc. COMP 2/6/23 -21% 52%
Sweetgreen Inc. SG 3/13/23 320% -280%
Lucid Group* LCID 4/10/23 -23% 31%
Trupanion TRUP 5/1/23 -17% 50%
Overall Portfolio Return -28% 68%

Sources:  New Constructs, LLC and company filings.
*Stocks removed from the Zombie Stock List. Performance tracked through the date each was removed. Linked report goes to the report in which the stock was removed.

Since our first report on June 23, 2022, the Zombie Stocks have fallen over 28% while the S&P 500 is up 40%. See Figure 2.

Figure 2: Combined Performance of Zombie Stocks List Through 7/1/24

Sources:  New Constructs, LLC and company filings.

Disclosure: David Trainer, Kyle Guske II, and Hakan Salt receive no compensation to write about any specific stock, style, or theme.

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