Remember when $4 stocks were just sad little penny stocks that your uncle Gary would ramble about at Thanksgiving? Well, Planet Labs (NYSE:PL) just proved that sometimes those underdogs have rockets strapped to their backs.
This satellite imaging company started 2025 trading at a humble $3.97 per share. Fast forward 11 months, and it’s sitting pretty at around $17.75 – that’s a casual 340% gain that would make even the most seasoned day trader do a double-take. And Thursday? The stock jumped 37% in a single day after earnings. Talk about making it rain from space.
So What Does Planet Labs Actually Do?
Think Google Earth, but if Google Earth had a subscription service and worked for the government. Planet Labs operates a fleet of satellites that circle our planet like very expensive, very smart paparazzi, taking pictures of Earth for anyone willing to pay for the data. Their clients? Everyone from NASA to NATO to companies that need to know what’s happening on the ground without actually being on the ground.
It’s basically the ultimate “pics or it didn’t happen” business model, except the pics come from space and cost millions.
The Numbers That Made Wall Street Pay Attention
Planet Labs just dropped their Q3 earnings, and the results were… well, astronomical (sorry, had to). Here’s what caught everyone’s eye:
- Revenue hit $81.3 million – up 33% from last year and beating estimates by a solid $7 million
- They’re basically breaking even now – adjusted earnings per share came in flat at $0.00, which sounds boring but is actually huge when analysts expected a 4-cent loss
- 97% of their revenue is recurring – meaning once you’re hooked on their satellite data, you keep paying for it
The company also announced they’re buying Bedrock Research, an AI company, because apparently having eyes in the sky wasn’t enough – now they want those eyes to be artificially intelligent too.
Who’s Writing the Checks?
Planet Labs isn’t just taking pretty pictures for Instagram. Their client list reads like a who’s who of organizations that take security very seriously. They signed a seven-figure extension with NATO (because apparently even military alliances need good satellite pics), plus deals with NASA, the US Navy, and various intelligence agencies.
Their backlog – basically money they’re guaranteed to make from signed contracts – is sitting at $734 million, up 216% from last year. That’s the kind of forward visibility that makes CFOs sleep better at night.
The Reality Check
Before you start planning your early retirement funded by satellite stocks, let’s pump the brakes for a second. After a 340% run-up, Planet Labs is trading at some pretty rich valuations. The price-to-sales ratio is getting into “this better work out” territory.
Wall Street analysts are bullish – Needham bumped their price target to $22, and Wedbush went to $20 – but that’s only about 11-12% upside from current levels. Not exactly the moonshot gains we’ve been seeing.
The company is generating free cash flow and is operationally profitable, which is great. But they’re still losing money on a GAAP basis thanks to all that satellite depreciation (turns out space equipment is expensive to maintain – who knew?).
The Bottom Line
Planet Labs has gone from penny stock to legitimate space business in less than a year. They’ve got government contracts, recurring revenue, and a business model that’s basically “we’ll watch the world for you.” In an increasingly uncertain world, that’s not a bad service to offer.
But after a 340% gain, this might be one of those “wait for the dip” situations. Keep it on your watchlist, but maybe don’t chase it at these levels. After all, what goes up to space sometimes needs to come back down to Earth before it goes up again.
Just remember: investing in space companies is literally rocket science, so don’t bet the farm on satellites just yet.