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When InvestingPro’s Fair Value models identified Seaport Entertainment Group Inc. (NYSE:SEG) as significantly overvalued in August 2024, the entertainment venue operator was trading at $30.62. Today, the stock trades at $19.56, representing a 42% decline that validates our analytical framework’s accuracy. For investors seeking similar opportunities, our Most overvalued list continues to identify potentially overvalued stocks.
Seaport Entertainment Group operates entertainment venues and dining establishments across major U.S. cities. When our models flagged the stock, the company was struggling with negative EBITDA of -$96.28 million and concerning EPS of -$154.16, despite revenue of $73.16 million. These fundamentals, combined with the stock’s elevated valuation metrics, triggered our overvaluation warning.
The subsequent performance has strongly validated InvestingPro’s analysis. The stock experienced significant volatility before ultimately declining to current levels, with monthly returns showing considerable instability. While revenue has improved to $90.50 million, the company continues to face profitability challenges with negative EBITDA of -$68.71 million, albeit showing some improvement.
Recent developments further support our initial thesis. The company recently launched a $175 million rights offering, indicating significant capital needs. While Seaport has announced expansion plans in dining and nightlife segments, Q1 2025 results showed a revenue decline, suggesting ongoing operational challenges.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, peer comparisons, and market-based metrics. This comprehensive framework helped identify SEG’s unsustainable valuation levels, with our models calculating a fair value significantly below the then-trading price of $30.62.
The success of this analysis demonstrates the power of data-driven investment decisions. Learn more about InvestingPro to access our Fair Value models, real-time alerts, and comprehensive financial analysis tools that can help you identify similar opportunities before the market catches up.