Key Points
-
Planet Labs’ stock has surged amid strong top-line growth and government contract awards.
-
The satellite Earth-imaging company announced a partnership with Nvidia earlier this year.
-
It recently announced a $1.5 billion at-the-market equity offering to expand its business.
- 10 stocks we like better than Planet Labs PBC ›
It has been an exciting year for space stocks. Coming into June, Planet Labs (NYSE: PL) stock had surged to over $51 per share and was up an eye-opening 162% year to date. However, the stock recently pulled back 37% from its all-time high just over one month ago.
Planet Labs has been riding high on the wave of strong top-line growth and a surge in government spending on space and defense. However, the company’s recent earnings forecast and equity raise have taken the air out of the balloon. Here’s what investors need to know.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Planet Labs’ stock has gone on a tear over the last year
Planet Labs operates a massive constellation of small satellites that capture daily high-resolution imagery of the planet. The company provides geospatial imagery, data archives, and analytics to intelligence, agricultural, and commercial customers for applications such as national security, crop yields, and deforestation monitoring.
The stock has soared over the last year, surging 432% as investors flock to booming space stocks. The company showcased solid top-line growth while teaming up with Nvidia to incorporate its GPUs into its satellites and deliver real-time AI insights to customers like never before. It is also riding a wave of contract wins, including awards with the U.S. National Geospatial-Intelligence Agency and the Swedish Armed Forces, and selection as a prime contractor under the Missile Defense Agency (MDA) SHIELD framework.
Image source: Getty Images.
Planet Labs stock surged following its previous three earnings reports, but its first-quarter results (for the period ending April 30) sent the stock tumbling. Part of its decline was driven by margin compression and a high forecast for capital expenditure for the year. During theearnings call Planet Labs guided its margin down from 56% in the first quarter to between 52% and 54% for the full year, with heavy capital investment totaling between $80 million and $95 million this year.
The biggest driver of the stock’s decline was its $1.5 billion at-the-market equity offering, which was also announced during itsearnings call Planet Labs entered into an agreement to sell up to $1.5 billion of its Class A common stock through at-the-market offerings, meaning it could sell shares in smaller portions over time. The proceeds would be used to expand manufacturing capacity and further build out its Earth-imaging infrastructure.
Should you buy the dip in Planet Labs?
Planet Labs is growing nicely and expanding its reach with its growing satellite platform. However, the equity offering highlights the risks of investing in high-growth, early-stage companies, and the $1.5 billion raise is a massive amount for a company with a market capitalization of $11.7 billion.
The company is spending big in hopes of a larger payoff long-term, and analysts project its revenue could grow by 34% compounded over the next three years. That said, Planet Labs stock is far from cheap, priced at 31.2 times sales, and analysts covering the company don’t foresee profitability until 2028 at the earliest.
Investors must balance growth with spending and recognize that Planet Labs is still an early-stage, rapidly growing company. If you do buy the stock, make sure it’s part of a diversified portfolio and size your position accordingly.
Should you buy stock in Planet Labs PBC right now?
Before you buy stock in Planet Labs PBC, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Planet Labs PBC wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $400,101!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,212,683!*
Now, it’s worth noting Stock Advisor’s total average return is 911% — a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of July 3, 2026.
Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Planet Labs PBC. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.