Up 340% YTD, is planet labs stock a buy?

At the beginning of 2025, Planet Labs (NYSE:PL) was trading in penny stock territory at around $3.97 per share on January 2.

Roughly 11 months later, the stock is trading at roughly $17.75 per share – up about 340% year-to-date. That includes a 37% jump on Thursday after the company released strong third quarter earnings.

If you haven’t heard of it, Planet Labs is one of the leading Earth-imaging companies, providing satellite imagery from its fleet of observation satellites circling the skies. It deploys a data-as-a-service model, contracting with government and companies for the data, imagery, and services they want, typically on a subscription basis.

In its fiscal third quarter, Planet Labs saw significant growth.

• Revenue: $81.3M, up 33% year-over-year. This beat estimates of $74M.
• Net loss: $59.2M, down from a net loss of $20.1M in the same quarter a year ago. This was skewed by a one-time $43M loss due to a change in fair value of warrant liabilities.
• Adjusted net loss: $914K, up from a net loss of $8M.
• Adjusted EPS: $0.00, or flat, up from a 3 cent per share net loss a year ago. This beat estimates for a 4 cent per share net loss.

The company generated record revenue in the quarter. It also had positive adjusted EBITDA for the fourth straight quarter and positive free cash flow for the third consecutive quarter.

We’re seeing strong traction with our AI-enabled global monitoring solutions, demonstrated by our recent award under the NGA’s Luno B program and expansion with NATO,” Will Marshall, Planet’s co-founder, CEO and chairperson, said. “We’re announcing our acquisition of Bedrock Research, an AI-enabled solutions company, to accelerate our roadmap in support of this demand.”

NASA, NATO and the Navy

Planet Labs signed several new deals in Q3, including a seven-figure extension with NATO. It also inked deals with NASA, US Navy, National Reconnaissance Office, National Geospatial-Intelligence Agency, AXA Digital Commercial Platform, Tennessee Department of Environment and Conservation, and an 8-figure deal with an international defense and intelligence customer for high-resolution imagery.

In addition, 97% of earnings in the quarter was from recurring annual contracts, which means it has stable, subscription-based income.

Also, its remaining performance obligations (RPO), contracts signed but not yet paid, are up 361% year-over-year to $672 million. Further, its overall backlog, including RPOs, is $734 million, up 216% year-over-year.

Looking ahead, Planet Labs anticipates revenue of $76 million to $80 million in Q4. For the full fiscal year, the company forecasts revenue of $297 million to $301 million. Further, the adjusted gross margin is targeted for 57% to 58% while adjusted EBITDA profit is projected to fall between $6 million and $8 million.

Is planet labs stock a buy?

Planet Labs got several price target upgrades on Thursday with Needham boosting its target to $22 per share and Wedbush raising it to $20 per share. That would be about an 11% to 12% increase.

Planet Labs has been operationally profitable and is generating free cash flow to fund its growth. It is still not profitable from a GAAP standpoint, but that is challenging because of the special accounting charges related to depreciation and amortization of its satellites.  

However, its price-to-sales ratio is pretty high, given the huge run up in the stock price. Investors should keep this stock on their radar, but after a blowout year, it might be a good idea to wait for a significant dip before jumping in.