Why Planet Labs Stock Is Back in Focus After Guidance and Index Moves

Planet Labs PBC (PL) is back on many investors’ watchlists after the company lifted its full year revenue outlook, successfully launched three new satellites, and shifted into larger Russell equity indexes.

Planet Labs stock has been volatile, with the share price falling 27.9% over the past 30 days while still showing a 53.8% year-to-date share price return and a very large 3-year total shareholder return. Recent guidance, capital raising and index moves are reshaping how investors view its growth potential and risks.

If Planet Labs has you thinking more broadly about space and AI opportunities, this is a good moment to see what else is on the move with 52 AI infrastructure stocks

With Planet Labs now in bigger indexes, a higher revenue outlook, a recent pullback and fresh capital for growth plans, the key question is simple: Is the stock undervalued today, or is the market already pricing in future growth?

Most Popular Narrative: 21.6% Undervalued

With Planet Labs trading at $31.38 against a narrative fair value of $40.00, the widely followed story in the market leans toward the stock being undervalued at today’s price, built on ambitious revenue, margin and cash flow expectations anchored to a 7.41% discount rate.

The significant $230 million contract with JSAT, particularly structured for front-loaded cash payments, is expected to drive meaningful cash flow accretion and support Planet Labs’ path to free cash flow positivity, impacting earnings positively. The expansion into the satellite services market and launching nearly 100 satellites within two years suggests a substantial increase in global capacity and revisit rates, with the potential to double the revenue growth rate in FY '27, supporting revenue and margin improvement.

Curious what has to happen for that valuation to add up? The narrative leans heavily on rapid revenue compounding, much stronger margins and a rich future earnings multiple. Want to see how those pieces fit together, and how far the assumptions stretch beyond Planet Labs’ current loss making position?

Result: Fair Value of $40.00 (UNDERVALUED)

However, this Planet Labs narrative can break if large defense or AI contracts slip, or if heavy satellite spending keeps cash flow and earnings under pressure for longer.

Another View: Planet Labs Through a P/S Lens

The Planet Labs narrative fair value suggests upside, but the current P/S ratio of 33.3x tells a very different story. That is far higher than the US Professional Services industry at 0.9x, the peer average at 1.5x, and even the fair ratio of 7.5x that the market could move toward over time.

This gap points to meaningful valuation risk if sentiment cools, especially with the company still loss making and forecast to remain unprofitable over the next 3 years. The question is simple for you as an investor: are you comfortable paying more than 4x the fair ratio for Planet Labs today?

Next Steps

Uncertain whether the bullish and bearish threads around Planet Labs reflect your own view? Take a closer look at both sides, then weigh the 1 key reward and 3 important warning signs.

Looking For More Investment Ideas Beyond Planet Labs?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.