Jabran Kundi
3 min read
In This Article:
We recently published a list of 20 Underperforming Stocks Targeted By Short Sellers. In this article, we are going to take a look at where Kohl’s Corporation (NYSE:KSS) stands against other underperforming stocks targeted by short sellers.
Short interest refers to the percentage of publicly available shares that have been sold short. It is an indicator used by many investors to determine how strong a company’s bear thesis may be. Due to the nature of short selling, the short interest has become a popular indicator among investors.
The reason it is given so much weightage is that people betting against a stock have usually done solid research and are confident of a company’s downfall. They take unlimited risk, so when big investors or the smart money shorts a stock, people take notice. They try to unearth the red flags that may have prompted the high short interest.
We decided to dig deeper and try to find out where smart money sees trouble ahead. To come up with our list of 20 underperforming stocks targeted by short sellers, we looked at the worst-performing stocks of the last six months and then ranked them by the short interest.
A close-up on a fashionable pair of the company's footwear, the details revealed in sharp focus.
Short interest: 41.87%
6 months’ performance: -62.94%
Kohl’s Corporation (NYSE:KSS) is an omnichannel retailer in the United States. The company provides footwear, beauty products, apparel, accessories, and home products. It sells its products under the Apt. 9, Jumping Beans, Croft & Barrow, Sonoma Goods for Life, Tek Gear, and SO brand names. The stock is down 63.17% in the last 6 months, with a short interest of 41.87%.
The recent tariffs announcement has significantly raised the risk of a recession As a result, most analysts have become bearish on the stock due to projected demand contraction and high inventory levels.
As per the guidance, the management expects a 5% to 7% sales decline in FY 2025. To boost sales, Kohl’s Corporation (NYSE:KSS) would need to raise promotions, which is likely to pressure gross margins. However, this guidance was released before the tariff implementation announcement, so it does not include the potential tariff impacts. The company expects gross margin expansion of 30 to 50 bps, which is quite challenging considering the current state of the company and the economy.
Overall, KSS ranks 1st on our list of underperforming stocks targeted by short sellers. While we acknowledge the potential of KSS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than KSS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
