Planet Labs stock rating downgraded by Citizens on limited upside potential

Investing.com - Planet Labs (NYSE:PL) stock rating was downgraded by Citizens from Market Outperform to Market Perform following the company’s October 16 Investor Day in New York City. According to InvestingPro data, the company’s stock has shown significant volatility, with a beta of 2.0 and a remarkable year-to-date return of 224.5%.

The downgrade comes as Planet Labs stock has surpassed Citizens’ former $11 price target by 26%, with shares trading up approximately 29% in the past month alone.

Citizens noted that while the investor day presentation focused on Planet’s ability to capitalize on sector megatrends including AI and increased defense spending, management provided what the firm characterized as a "somewhat lackluster long-term financial outlook."

The research firm expressed concern about the company’s material business model shift toward satellite services and additional fleet capacity build-out, stating the investor day "left us with more questions than answers."

After conducting additional analyses, Citizens concluded that the "path to further upside in the stock is limited" and now views the current risk/reward profile as balanced, representing a "material change" to their original investment thesis.

In other recent news, Planet Labs has been actively securing significant contracts and partnerships. The company announced a $12.8 million contract with the National Geospatial-Intelligence Agency for AI maritime solutions, focusing on vessel detection and monitoring in the Asia-Pacific region. Additionally, Planet Labs secured a $7.5 million contract renewal with the US Navy to provide vessel detection and monitoring services in the Pacific, integrating their data into the SeaVision platform.

In terms of financial outlook, Needham raised its price target for Planet Labs to $16, maintaining a Buy rating, after the company’s Investor Day highlighted strategic focuses and new financial targets. Cantor Fitzgerald also increased its price target significantly to $20, maintaining an Overweight rating, following reassessments of sales growth and financial metrics due to new contract wins. Furthermore, Planet Labs extended its partnership with European research organization VITO to enhance Earth observation capabilities, integrating satellite imagery with analytics for agriculture and environmental resilience. These developments reflect Planet Labs’ ongoing efforts to expand its services and strengthen its market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.