Remember when your mom told you to stop staring at the sky and do something productive? Well, Planet Labs (NYSE:PL) basically turned sky-gazing into a $17.75-per-share business model, and honestly? It’s working out pretty well for them.
This little satellite company started 2025 trading like a penny stock at $3.97. Fast forward 11 months, and it’s sitting pretty at nearly $18 per share – that’s a casual 340% gain that would make even your crypto-obsessed cousin jealous. Thursday alone saw the stock rocket up 37% after they dropped some seriously impressive earnings.
So What Do These Space Nerds Actually Do?
Planet Labs is basically Google Earth’s cooler, more profitable sibling. They’ve got a fleet of satellites circling Earth like very expensive, very smart pigeons, taking pictures and collecting data. Then they sell this intel to governments and companies on a subscription basis – think Netflix, but for knowing what’s happening on planet Earth.
Their Q3 numbers were pretty stellar (pun absolutely intended):
- Revenue hit $81.3M – up 33% year-over-year and beating estimates by $7M
- They’re basically breaking even now with flat adjusted earnings per share (up from losing 3 cents last year)
- Cash flow is positive for the third straight quarter
The really juicy part? They’ve got $734 million in backlog – that’s contracts already signed but not yet paid. It’s like having a really, really good Christmas list that people are actually going to fulfill.
Who’s Buying All This Space Data?
Turns out, everyone wants to know what’s happening everywhere. Planet Labs just signed deals with NASA, the US Navy, NATO (yes, that NATO), and a bunch of other acronym-heavy organizations that probably know where you parked your car better than you do.
The NATO deal alone was worth seven figures, and they landed an eight-figure contract with an international defense customer. When defense contractors are throwing around eight-figure checks for your satellite photos, you know you’re onto something.
The Reality Check
Here’s where your financially responsible friend (that’s me) has to rain on the parade a little. After a 340% run-up, this stock is trading at a pretty rich price-to-sales ratio. Analysts are bullish – Needham bumped their target to $22, Wedbush to $20 – but that’s only about 11-12% upside from here.
Planet Labs is operationally profitable and generating free cash flow, which is great. But they’re still losing money on paper due to all the accounting gymnastics around depreciating satellites (apparently space equipment doesn’t hold its value well – who knew?).
The Bottom Line
Planet Labs has figured out how to monetize the ultimate high ground – literally space. They’ve got recurring revenue, growing contracts, and customers who really, really need to know what’s happening on Earth.
But after this rocket ship of a year, you might want to wait for a dip before jumping aboard. Sometimes the best investment strategy is patience, even when you’re dealing with actual rocket science.