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Investing.com - Craig-Hallum raised its price target on Planet Labs (NYSE:PL) to $11.00 from $7.00 on Tuesday, while maintaining a Buy rating on the stock. The new target represents potential upside from the current price of $9.13, though InvestingPro analysis suggests the stock is trading above its Fair Value after an impressive 403% return over the past year.
The firm cited Planet Labs’ strong performance across multiple use cases including Military, Maritime wide area monitoring, and Agriculture. Craig-Hallum noted that the company’s capabilities have expanded beyond imagery to include AI object/change detections, high-resolution Pelican satellite launches, and the Sinergise platform for easy access. The company maintains strong operational efficiency with impressive gross margins of 59% and a healthy current ratio of 1.75.
Planet Labs recently launched units 3 and 4 of its Pelican fleet, which has secured significant contracts including a $230 million deal with Japan and a $280 million agreement with Germany. The company is benefiting from broader space industry trends including NewSpace, increased military space spending, and the pivot to commercial vendors.
For the most recent quarter, Planet Labs reported 11% sequential growth and 20% year-over-year growth, driven by mid-seven-figure Annual Contract Value expansions from customers including INDOPACOM, the Navy, and NATO, along with increased usage revenue.
The National Reconnaissance Office (NRO) also signed an expanded Electro-Optical Commercial Layer (EOCL) contract with Planet Labs, which represents approximately 16% of the company’s revenue, signaling positive momentum for future spending.
In other recent news, Planet Labs reported robust fiscal second-quarter results, achieving a 20% year-over-year revenue growth, the highest in three years. The company posted revenue of $73.4 million for the quarter, surpassing the consensus expectation of $66.0 million. Following these strong earnings, Needham raised its price target for Planet Labs from $8 to $12, maintaining a Buy rating. Similarly, JMP Securities increased its price target to $11, up from $8, and continued to rate the stock as Market Outperform. Northland also adjusted its price target to $10 from $8, while keeping an Outperform rating, highlighting that Planet Labs exceeded growth expectations two quarters ahead of schedule.
In addition to its earnings performance, Planet Labs announced plans to offer $300 million in convertible senior notes due 2030 to qualified institutional buyers. The company is also providing an option for initial purchasers to buy up to an additional $45 million in notes to cover over-allotments. These recent developments reflect Planet Labs’ strategic financial maneuvers and positive reception from analysts.
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