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Is This Outer Space Tech Stock a Buy for 2025?
PLPlanet Labs PBC(PL) The Motley Fool·2025-01-26 15:17

Company Overview - Planet Labs operates in the outer space sector, providing satellite data about the Earth to businesses and governments [1] - The company claims to have the largest fleet of orbiting satellites in history, with approximately 200 satellites [3] - Its competitive differentiation lies in its ability to collect near real-time satellite data globally, which is easy to interpret and use, unlike legacy satellite companies that provide outdated and complex data [5] Financial Performance - Planet Labs achieved record revenue of 61.3millioninitsfiscalthirdquarter,an1161.3 million in its fiscal third quarter, an 11% year-over-year increase [6] - The company reduced its third-quarter costs year over year, reaching a record gross margin of 61%, up from 47% in the previous fiscal year [7] - It expects gross margins to improve further to at least 63% in the fourth quarter [7] - Despite rising revenue and lower costs, the company reported a net loss of 20.1 million in the third quarter, though this was an improvement from the previous year's net loss of 38million[9]−PlanetLabsanticipatesachievingadjustedEBITDAprofitabilityinthefourthquarter,withitsadjustedEBITDAimprovingforsixconsecutivequarters[10]GrowthStrategy−ThecompanyisleveragingAItohelpcustomersderivevaluefromitsdataquickly,improvingcustomerretention[11]−Itisexploringnewindustries,suchastheenergysector,toexpanditsclientele[11]−PlanetLabsexpectsfourth−quartersalestoreachatleast38 million [9] - Planet Labs anticipates achieving adjusted EBITDA profitability in the fourth quarter, with its adjusted EBITDA improving for six consecutive quarters [10] Growth Strategy - The company is leveraging AI to help customers derive value from its data quickly, improving customer retention [11] - It is exploring new industries, such as the energy sector, to expand its clientele [11] - Planet Labs expects fourth-quarter sales to reach at least 61 million, up from 58.9millionintheprioryear,whichwouldbringfiscal2025revenueto58.9 million in the prior year, which would bring fiscal 2025 revenue to 244 million, a double-digit increase from fiscal 2024's 221million[12]ValuationandInvestmentConsiderations−PlanetLabs′stockpricerosemorethan90221 million [12] Valuation and Investment Considerations - Planet Labs' stock price rose more than 90% over the past year, reaching a 52-week high of 4.99 in December [1][2] - The company's price-to-sales (P/S) ratio is elevated but not excessively high compared to earlier years when the stock was overpriced [15] - Investors may consider waiting for a share price drop or the release of fourth-quarter results before making a purchase decision [15] Market Position and Opportunities - Planet Labs serves high-profile customers, including NASA, the U.S. Department of Defense, and the German space agency [6] - Its data supports disaster management, agriculture, and government defense and intelligence efforts [4] - The company's success is partly driven by the U.S. government's increasing interest in space exploration [13]