Planet Labs (PL 5.73%) operates the largest constellation of Earth observation satellites in the world. On Thursday, it’s also looking like one of the biggest gainers among space stocks, gaining 8.6% through 11:30 a.m. ET.
That’s curious, because the latest bit of news out of Planet Labs initially received the opposite reaction from investors. When the company announced yesterday that it had won a “six-figure deal” to help Global Fishing Watch “map small vessel activity across millions of square kilometers of the ocean” to keep better track of global fishing trends, investors sold off Planet Labs stock by about 1.3%.
Fishing for good news at Planet Labs
Were investors right to sell Planet Labs stock yesterday, or are they right to be buying it back (and buying rather heavily) today? My hunch is the former.
A “six-figure deal” may sound like a lot of money to you and me. I’m currently trying to sell my 2014 Mini Cooper, for example, and I’d personally jump at a “six-figure offer” to buy it.
But for a company like Planet Labs, valued at nearly $1 billion in market cap and bringing in nearly a quarter-billion dollars in annual revenue (1 billion is 10 figures, by the way), six figures isn’t going to move the needle much at all. It could refer to a deal as small as $100,000, and it’s certainly less than $1 million.
Planet Labs reports earnings soon
The fact that Planet Labs felt the need to highlight this particular contract, moreover, seems to imply that the company doesn’t have any other news of greater significance to report. And this, in turn, bodes poorly for the company’s upcoming fiscal Q3 2025 earnings report, which Planet Labs also announced yesterday, scheduled to take place on Dec. 9.
Analysts are forecasting another loss for Planet Labs in that report, by the way — $0.04 per share — despite annual sales growth of 14%. This company needs to do a lot better than signing just “six-figure” contracts to beat those numbers.
Rich Smith has positions in Planet Labs Pbc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
