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On Friday, Benchmark analysts maintained their Buy rating and a $7.00 price target on Planet Labs (NYSE:PL) shares, currently trading at $3.17. According to InvestingPro data, five analysts have revised their earnings upwards for the upcoming period, with price targets ranging from $4.50 to $8.00. The firm’s analysts highlighted the company’s adjusted EBITDA for the fourth quarter of fiscal year 2025, which surpassed expectations despite trailing twelve months EBITDA of -$70.48 million. While the revenue guidance for fiscal year 2026 was in line with forecasts, the adjusted EBITDA guidance fell short of Wall Street predictions. However, they noted the impact of the significant $230 million agreement with JSAT, which will be factored into the fiscal year 2026 performance.
The deal with JSAT, considered transformative for Planet Labs, involves selling satellite hardware directly to JSAT instead of providing traditional data from Planet Labs’ own satellites. This strategic shift is expected to cut the company’s cash burn by half in fiscal year 2026 and provides a pathway to positive free cash flow within 24 months. The company’s strong financial position is evidenced by its healthy current ratio of 2.13 and minimal debt-to-capital ratio of 0.02, as reported by InvestingPro. Once the JSAT satellite constellation is operational, Planet Labs will retain the rights to sell data feeds to third-party customers outside of JSAT’s requirements, which is anticipated to boost the company’s profit margins.
The previous fiscal year, 2025, was described as a transitional period for Planet Labs as it shifted focus to solutions-based products, achieving impressive revenue growth of 10.72% and maintaining strong gross profit margins of 57.18%. The upcoming fiscal year is set to concentrate on leveraging artificial intelligence products that utilize the company’s extensive long-term satellite data library. Analysts also pointed out that the commercial agricultural market is entering fiscal year 2026 in a stronger position, with new customer acquisitions, contract renewals, and larger agricultural firms increasing their data usage. For deeper insights into Planet Labs’ financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Planet Labs reported mixed financial results for the fourth quarter of fiscal year 2025. The company achieved an adjusted EBITDA of $2.4 million, surpassing the consensus of $1.4 million, with a non-GAAP gross margin of 64.7%, exceeding expectations of 63.5%. However, revenue projections for the first quarter of fiscal year 2026 fell short of Wall Street’s expectations, with anticipated revenue between $61.0 million and $63.0 million, below the expected $65.3 million. Cantor Fitzgerald maintained an Overweight rating with a $6.30 target, while JMP Securities held a Market Outperform rating with a $6.50 target. Analysts noted that the company’s $230 million contract with JSAT is expected to influence future sales and cash flow. Planet Labs also highlighted the successful capture of first light images from the Pelican-2 satellite, marking progress in its technological advancements. The company continues to focus on strategic partnerships and expanding its manufacturing capabilities. Despite some financial challenges, analysts from firms like Cantor Fitzgerald and JMP Securities remain optimistic about Planet Labs’ long-term strategic direction.
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