To do less well than expected. The measuring stick is the whole point: underperforming is never simply 'doing badly', it is doing worse than what people had a right to expect from you — from your past record, your ability, your price, or a target that was set. A shop can make a healthy profit and still underperform, if the plan said it would make twice as much. The word grew up in business and finance and still lives there most comfortably: a business underperforms when it fails to earn the profit it forecast, and a share or a fund underperforms when it grows more slowly than the market or the other funds it is compared with. In that financial sense it is often used with a direct object — 'the fund underperformed the index' — which is unusual and worth noticing, because everywhere else the verb stands alone. It has spread well beyond money: an underperforming school, an underperforming student, a team that underperformed all season, an engine that underperforms in cold weather. In offices it has become a soft, official word for someone whose work is not good enough — 'we need to talk about your performance' — and precisely because it sounds neutral and technical, it can land harder than a plain complaint. Forms: underperform, underperformed, underperforming; the noun is 'underperformance'.