Is It Too Late to Buy Planet Labs Stock?

Core Viewpoint - Planet Labs PBC has experienced a significant stock price increase of over 400% in the last year, raising questions about its sustainability and future growth potential [2][8]. Company Overview - Planet Labs was founded in 2010 by three former NASA scientists and has developed a unique capability to provide up-to-date satellite images of the entire planet, amassing nearly a 10-year archive of proprietary data [3][4]. - The company is the only Earth imaging firm that photographs the entire planet frequently, giving it a total addressable market (TAM) of $128 billion [4]. Financial Performance - In the first nine months of 2025, Planet Labs reported revenue of $221 million, a 21% increase from the same period in 2024 [4]. - Despite reducing operating expenses by 7%, the company incurred a net loss of $94 million due to a $39 million loss from changes in warrant liabilities, compared to a loss of $88 million in the same period the previous year [5][6]. - The company generated free cash flow of $59 million during the first nine months of 2025, which may mitigate concerns over net losses [6]. Valuation Metrics - Planet Labs currently has a market capitalization of $7.1 billion and a price-to-sales (P/S) ratio of 23, significantly above its historical average of 5, indicating a high valuation [7][8]. - The company is not expected to earn a profit in the foreseeable future, resulting in the absence of a price-to-earnings (P/E) ratio [7]. Investment Considerations - The recent stock price surge suggests that the market recognizes Planet Labs' growth potential, but the high valuation warrants caution for new investors [8][10]. - Given that the company has only capitalized on less than 1% of its TAM, there remains substantial growth potential, making it potentially not too late to invest [9][12]. - Investors are advised to consider deploying only small percentages of their capital to manage risk while still allowing for potential gains [11].