Zombies are companies that earn just enough money to continue operating and service debt but are unable to pay off their debt. Such companies, given that they just scrape by meeting overheads (wages, rent, interest payments on debt, for example), have no excess capital to invest to spur growth. Zombie companies are typically subject to higher borrowing costs and maybe one just event away from insolvency or a bailout. Zombies are especially dependent on banks for financing, which is fundamentally their life support. Zombie companies are also known as the living dead or zombie stocks.
Zombies often fail, falling victim to the high costs associated with debt or certain operations, such as research and development. They may lack the resources for capital investment, which would create growth. If a zombie company employed so many people that its failure would become a political issue, it may be deemed too big to fail, as was the case with many financial institutions during the 2008 financial crisis.
Given that many analysts expect that zombies will eventually be unable to meet their financial obligations, such companies are considered riskier investments and will, therefore, see their share prices suppressed.

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