As the U.S. economy navigates a high-interest-rate environment, a growing cohort of companies find themselves in a precarious position: they can’t generate enough profit to cover their interest costs — a classic definition of a zombie company. Analysts often flag firms with persistently low interest coverage ratios (ICR) — especially below 2 — as vulnerable, because they struggle to finance debt without refinancing on unfavorable terms.
Recent economic stress has amplified this problem. By late 2025, nearly one in five U.S. public companies reportedly earned too little to make interest payments, collectively shouldering more than $1 trillion in debt — a legacy of pandemic-era borrowing that’s now coming due under tougher financial conditions.
In 2026, the fate of these so-called “zombies” will shape broader market risks — from credit tightening to increased bankruptcy filings. Here’s a look at 10 companies widely cited by financial analysts and zombie stock trackers as emblematic of this danger.
🧟♂️ The Top 10 U.S. Zombie Companies Facing Debt Distress in 2026
1. Five9 Inc. (FIVN)
Once removed from zombie stock lists, this cloud-based contact center software company re-entered as a zombie stock due to a negative interest coverage ratio and persistent cash burn. It faces a narrow cash runway — around 24 months at current burn rates — and will likely need expensive financing to survive beyond 2026.
2. Carvana Co. (CVNA)
The online used car retailer has appeared on long-standing zombie stock lists due to chronic losses, heavy debt, and weak earnings. Carvana’s ability to service debt remains strained, exposing it to refinancing risk in a tougher credit environment.
3. Peloton Interactive (PTON)
Once a pandemic darling, Peloton still grapples with significant leverage relative to earnings and thin profitability. It has been flagged among companies that struggle to generate income sufficient for recurring financial obligations.
4. AMC Entertainment Holdings (AMC)
The cinema chain relies heavily on refinancing and continued cash flow to service debt. Despite cultural visibility, its long-term solvency is questioned if borrowing costs remain high and box-office revenues don’t rebound sufficiently.
5. Beyond Meat, Inc. (BYND)
Plant-based food producer Beyond Meat has appeared on zombie stock lists due to weak earnings, negative book value, and ongoing cash concerns that could hinder its ability to finance obligations without dilutive capital raises.
6. Compass Inc. (COMP)
The real estate technology platform has shown prolonged underperformance with negative economic book values, making it vulnerable in an environment where debt service becomes more expensive and financing options tighter.
7. Wayfair (W)
The online home goods retailer has carried elevated debt relative to operating earnings and, despite strong brand recognition, is pointedly sensitive to debt service costs and shifting consumer spending patterns.
8. Affirm Holdings (AFRM)
The fintech lender has battled persistent losses coupled with credit-dependent growth, leaving it susceptible if capital markets tighten further and refinancing becomes costlier or less available.
9. RingCentral (RNG)
Cloud communications provider RingCentral has struggled with negative or low interest coverage, shrinking cash positions, and competitive pressures — traits common among firms flagged as zombies needing external funding to stay afloat.
10. Sweetgreen (SG)
The fast-casual salad chain — while not insolvent — has experienced weak cash flows and large losses relative to operating income, drawing attention from zombie stock trackers that monitor firms with poor debt-servicing metrics.
What Makes These Companies Zombie Risks?
Economists define zombie companies as firms that:
- Generate too little profit to cover interest payments on debt (often ICR < 2 for extended periods).
- Depend on rolling over debt rather than paying it down, especially as borrowing costs rise.
- Burn cash or have thin free cash flow, increasing reliance on fresh financing or equity dilution to survive.
The current macroeconomic backdrop — elevated interest rates and tighter credit — amplifies these pressures. Across the U.S., analysts estimate zombie companies reached levels not seen since the early 2020s due to pandemic borrowing binge effects finally unravelling.
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Bankruptcy Risks in 2026
While not all companies on zombie stock lists will fail outright, several forces increase bankruptcy likelihood in 2026:
🔹 Rising Interest Costs
Zombie firms built on low-rate financing now face refinancing at significantly higher yields, squeezing already narrow margins.
🔹 Tightening Credit Markets
Lenders have grown cautious, reducing access to cheap capital just as debt maturities come due, especially for weak balance sheets.
🔹 Economic Slowdowns
Reduced consumer demand in key sectors — retail, entertainment, discretionary services — deepens earnings volatility.
🔹 Cascading Defaults
Corporate bankruptcies jumped in 2025, reflecting these stresses (with large and mid-sized cases more frequent than in prior years).
Companies like First Brands Group — an auto parts maker that succumbed to Chapter 11 bankruptcy in late 2025 after failing to secure financing — illustrate how bad debt structures and opaque financing can rapidly lead to collapse.
Final Thoughts
The group of U.S. companies currently flagged as zombies highlights structural risks in corporate credit markets. While some may survive through restructuring or strategic pivots, others could be pushed into bankruptcy if debt costs remain prohibitive and refinancing dries up.
For investors and policymakers, monitoring interest coverage ratios, cash runway, and debt maturity profiles remains crucial to understanding which firms are merely weak — versus truly on the brink of insolvency heading into 2026.