Actions of Planet Laboratories (NYSE: PL) fell about 10% this week, according to data from S&P Global Market Intelligence. The company, a space economy stock that operates a fleet of satellites for regular imaging services, is making strong progress with potential new contracts for defense, civil and corporate use cases. The stock is up 487% in the past 12 months after reporting strong profit growth and a new partnership with Alphabet for artificial intelligence (AI) data centers.
However, as of 10:00 am EST on Friday, January 23, Planet Labs stock is down 10% this week. Here’s why.
Planet Labs’ last quarter earnings were fantastic. Revenue grew just 33% year-over-year to $81 million, but its order book rose a whopping 216% to $734 million. More and more clients, both defense and corporate, are turning to Planet Labs for space imaging services. It even has a new research project with Alphabet to potentially build data centers in orbit.
So why did stocks fall this week? First, we saw a widespread break in momentum in the broader market due to the flare-up around Greenland-focused tariffs. Although this issue appears resolved (for now), many speculative stocks, such as Planet Labs, have fallen from their highs. There was also an insider sale by the CFO of Planet Labs. Ashley Johnson sold shares worth $4 million, which may be a negative sign for investors after a massive price increase.
Overall, Planet Labs investors are probably concerned about the stock’s current valuation. It has a market capitalization of $8.33 billion, compared to just $81 million in quarterly revenue, and a price-to-sales (P/S) ratio of 28. This will induce volatility in the stock price in the future.
Although the stock fell this week, Planet Labs is up nearly 500% in the last year alone. It has a high P/S ratio and is not profitable. Yes, the company is getting a ton of new contracts, but that doesn’t mean you should buy them at any price.
Despite the stock’s slight decline this week, Planet Labs stock is not a buy at the current level.
Before you buy shares in Planet Labs PBC, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Planet Labs PBC was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.