We’re taking one stock off our Zombie Stock list but leaving it in the Danger Zone. While we believe the risk of going to $0/share is diminished, the stock remains significantly overvalued.
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.
See this index and the end of this report for performance details on all of the Zombie Stocks.
Rivian Automotive (RIVN: $13/share) – Removing From Zombie Stock List – down 63% vs. S&P up 33%
We named Rivian Automotive a Zombie Stock on August 8, 2022 due to its lack of profits, massive cash burn that was likely to accelerate as the company ramped up vehicle production, and overvalued stock price.
Since naming Rivian a Zombie Stock in August 2022, RIVN has outperformed as a short by 96%, falling 63% compared to a 33% gain for the S&P 500. Since we first placed Rivian in the Danger Zone, the stock has outperformed as a short by 104%, falling 87% compared to a 17% gain in the S&P 500.
Volkswagen’s recently announced investment – up to $5 billion – in Rivian, along with the software joint venture between the two companies significantly diminishes the likelihood RIVN goes to $0/share.
The joint venture and investment extend Rivian’s runway before it will run out of cash or need another (potentially) dilutive capital raise. However, it is yet to be seen if the venture will help Rivian lower costs and increase margins. Without such improvement, Rivian remains an unprofitable EV manufacturer with an overvalued stock price, which is why it remains in the Danger Zone.
Figure 1: RIVN vs. S&P 500 – Price Return – Successful Zombie Stock Short Call
Sources: New Constructs, LLC and company filings
Note: Gain/Decline performance analysis excludes transaction costs and dividends.
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 2 shows all 33 Zombie Stocks. We mark those that have been removed from the list with an asterisk.
Figure 2: 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 3.
Figure 3: Combined Performance of Zombie Stocks List Through 7/1/24
Sources: New Constructs, LLC and company filings.
This article was originally published on July 2, 2024.
Disclosure: David Trainer, Kyle Guske II, and Hakan Salt receive no compensation to write about any specific stock, style, or theme.
Questions on this report or others? Join our online community and connect with us directly.