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On Wednesday, Benchmark analyst Josh Sullivan increased the price target for Planet Labs (NYSE:PL) shares to $7.00, rising from the previous $4.00, and reaffirmed a Buy rating on the company’s stock. The new target represents potential upside from the current price of $6.38, with the stock already showing impressive momentum, gaining 16.22% in the past week and 220.9% over six months. According to InvestingPro analysis, Planet Labs is currently trading above its Fair Value. Sullivan’s assessment follows a comprehensive update of their financial model and price target assumptions for Planet Labs.
Sullivan highlighted that the new price target, which is based on 5.9 times the fiscal year 2026 enterprise value to sales ratio (ending January 2025), reflects a comparison with peers in the space economy sector. He noted that companies such as LUNR, BKSY, RKLB, and RDW have experienced a rally following the recent election, with the expectation that the new Trump Administration will adopt a favorable stance towards commercial models in the space industry. For detailed peer comparison and comprehensive analysis, InvestingPro subscribers can access the Pro Research Report, which covers 1,400+ US stocks with intuitive visuals and expert insights.
The analyst pointed out that Planet Labs is approaching a pivotal phase, as the company is nearing EBITDA break-even, has consistently managed costs and burn rate, and is seeing a steady flow of new contracts. Sullivan specifically mentioned a significant $230 million, 7-year contract win for Planet Labs. Under the terms of this deal, the customer will cover the upfront costs for the Pelican satellite, while Planet Labs retains the ability to sell excess data capacity to global customers.
This contract structure is advantageous for Planet Labs as it mitigates some of the risks associated with deploying new capacity and is expected to generate substantial cash flow in fiscal year 2026 and beyond. Sullivan’s optimistic outlook for Planet Labs reflects the company’s strategic position and potential for future growth within the commercial space economy.
In other recent news, Planet Labs has been the focus of several significant developments. The company announced a seven-year, $230 million contract with an Asia-Pacific commercial partner, marking a substantial step forward in its business trajectory. This contract, involving the construction and delivery of a fleet of Pelican high-resolution satellites, was met with positive reactions from analysts at Cantor Fitzgerald, who maintained an Overweight rating on Planet Labs with a $6.30 price target.
Moreover, Needham analysts upped their price target for Planet Labs to $8.00, following the announcement of this major contract. They emphasized the innovative structure of the deal, which effectively prepays for future Earth Observation services and provides financial support for the expedited rollout of the Pelican constellation.
In addition to these developments, Planet Labs has also secured a multi-year contract with the European Space Agency (ESA), marking its inclusion in the Copernicus Contributing Missions. This strategic move is set to enhance the geospatial data available to analysts globally. JMP Securities analyst Trevor Walsh also raised the price target for Planet Labs to $6.50, emphasizing the company’s robust imagery archives and diversified revenue streams.
Finally, Planet Labs was selected as one of the vendors for the National Geospatial-Intelligence Agency’s Luno B commercial data contract, valued at up to $200 million. This contract aims to provide timely GEOINT to support decision-making for warfighters, policymakers, and mission partners. These are the recent developments that have placed Planet Labs in a favorable position in the satellite imagery market.
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