Today witnessed an 8% increase in Value of Planet Labs' shares.
Planet Labs (PL, facing a 1.52% decrease) currently oversees the world's largest fleet of Earth observation satellites. Interestingly, it's also projected to be among the top performers in the space stock market, soaring by 8.6% before 11:30 a.m. ET on Thursday.
This unexpected upward trend is striking, given the investors' initial response to Planet Labs' latest announcement. Yesterday, the company shared that it had secured a "hefty six-figure contract" to support Global Fishing Watch in monitoring minor shipping activities across numerous million-square-kilometer stretches of the ocean, enhancing global fishing patterns tracking. Sadly for Planet Labs, this news prompted investors to offload their shares by approximately 1.3%.
Seeking upside at Planet Labs
Were investors justified in selling off Planet Labs shares yesterday, or is their current increased interest (and heavy buying) a sound move? My estimation leans towards the former.
A "six-figure contract" might sound enticing to us regular folks. For example, I'm desperate to sell my 2014 Mini Cooper, and I'd be thrilled with a "six-figure offer" to purchase it.
However, for a company like Planet Labs, valued at a billion dollars in market cap and generating nearly a quarter-billion in yearly revenue (bear in mind, a billion is 10 zeros), six figures doesn't go far in contributing to substantial growth. Besides, it could refer to deals as small as $100,000, and undoubtedly falls short of the million-dollar mark.
Planet Labs upcoming earnings
The company's decision to stress this specific agreement, furthermore, gives the impression that it may not have other substantial news to share. Sadly, this indicates a potential setback for the company's forthcoming Q3 2025 fiscal earnings report, which Planet Labs announced on the same day, scheduled for December 9.
Analysts predict another loss for Planet Labs in this report, amounting to $0.04 per share, despite an impressive 14% growth in annual sales. To surpass these figures, the company urgently needs to secure deals beyond the "six-figure" range.
Despite the smaller-than-expected size of the contract, Planet Labs may still have opportunities in finance and investing to boost its earnings. The company could consider diversifying its revenue streams by exploring additional partnerships or investments in related fields.
In light of the upcoming Q3 2025 fiscal earnings report, securing larger deals beyond the "six-figure" range could significantly improve Planet Labs' financial performance and help it surpass analysts' predictions.
