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Friday – Cantor Fitzgerald has reiterated its Overweight rating on Planet Labs (NYSE:PL) with a steady price target of $6.30, representing significant upside from the current price of $4.24. According to InvestingPro data, the stock has shown remarkable momentum with a 106% gain over the past six months, though it currently trades below InvestingPro’s Fair Value estimate. The decision comes in the wake of the company’s fourth-quarter earnings call, which, according to analysts, led to some post-market underperformance due to investor confusion around gross margin and cash flow mechanics. Analysts anticipate that the initial underperformance will be short-lived, with only a slight lag expected in the following trading session.
The fourth-quarter results from Planet Labs were a mixed bag compared to Wall Street expectations, and the forecast for fiscal year 2026 appeared weaker than anticipated. The company maintains impressive gross profit margins of 57.2%, though InvestingPro analysis indicates the company is not expected to achieve profitability this year. However, analysts observed that the consensus estimates had not fully accounted for the impact of Planet Labs’ recent $230 million win with JSAT, which is expected to influence sales, margins, and cash flow. Typically, such manufacturing wins exert upfront pressure on cash and margins.
Analysts highlighted Planet Labs’ strategic push to sell spacecraft to key international customers, aiming to scale the business. The company’s strong financial position, with more cash than debt and a healthy current ratio of 2.13, provides flexibility to execute this strategic shift. This shift may challenge the previous expectation among investors that the company would emerge as a pure-play data entity with very high incremental margins. The analysts believe that Planet Labs’ strategic moves will pay off, allowing the company to become an essential partner, expand its manufacturing capabilities, and grow its capacity.
The report also suggests that geopolitical volatility, particularly the United States’ strategic retrenchment, could present opportunities for Planet Labs’ business model. The reduction in the availability of classified U.S. data might unlock new potential for the company’s commercial offerings, countering earlier concerns about possible disruptions.
In conclusion, the analysts expressed a positive outlook on Planet Labs, citing the company’s intelligent strategic decisions, the escalating global threats leading up to 2027, and upcoming catalysts for its international business pipeline. Despite this optimistic view, they advised investors to exercise caution in the short term due to the market’s heightened sensitivity to risk assets. For deeper insights into Planet Labs’ valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis including 12 additional ProTips and detailed financial metrics in the Pro Research Report.
In other recent news, Planet Labs reported mixed financial results for the fourth quarter of fiscal year 2025, with an adjusted EBITDA of $2.4 million, surpassing the consensus estimate of $1.4 million. The company’s non-GAAP gross margin also exceeded expectations at 64.7%. However, Planet Labs’ guidance for the first quarter of fiscal year 2026 fell short of Wall Street expectations, with revenue projections between $61.0 million and $63.0 million, below the anticipated $65.3 million. For the full fiscal year 2026, the company expects revenue between $260.0 million and $280.0 million, which is slightly below the consensus estimate.
Planet Labs also recently announced a significant commercial agreement with JSAT, valued at $230 million, to build and operate a constellation of 10 high-resolution satellites. JMP Securities maintained a Market Outperform rating and a $6.50 price target for Planet Labs, despite the mixed financial outlook. Additionally, the company achieved its first quarter of adjusted EBITDA profitability in Q4 2025. The defense and intelligence sector revenue grew by 20% year-over-year, contributing to a record annual revenue of $244.4 million, reflecting an 11% increase from the previous year.
The company also highlighted successful technological advancements, including the capture of first light images from the newly launched Pelican-2 satellite. Looking forward, Planet Labs plans to build and launch nearly 100 satellites over the next two years, aiming for cash flow profitability within 24 months. The firm is also exploring opportunities in AI, collaborating with Anthropic to enhance satellite data capabilities.
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