What Happened?
Shares of earth imaging satellite company Planet Labs (NYSE: PL) fell 4.3% in the afternoon session after an analyst at Zacks Research downgraded the stock's rating from 'hold' to a 'strong sell'. The downgrade was reportedly influenced by the company's recent earnings miss. Despite Planet Labs beating revenue expectations with a reported $81.25 million, it posted an earnings per share (EPS) of ($0.19). This figure was significantly below the consensus estimate of ($0.02), raising concerns for analysts and investors about the company's profitability and pressuring the stock.
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What Is The Market Telling Us
Planet Labs’s shares are extremely volatile and have had 61 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 36.6% on the news that it reported much better-than-expected financial results for its third quarter and provided a strong outlook. For the quarter, Planet Labs announced revenue of $81.25 million, a 32.6% year-on-year increase, and adjusted earnings per share of $0. This performance surpassed Wall Street's expectations for revenue of $72.13 million and a loss of $0.04 per share. The company also turned free cash flow positive, reporting $911,000 compared to a loss of $3.56 million in the same quarter last year. Looking ahead, the company provided a bullish outlook, guiding for fourth-quarter revenue of $78 million at the midpoint, ahead of the $73.39 million consensus. Furthermore, it raised its full-year adjusted EBITDA guidance to $7 million, a significant improvement from analysts' prior estimate of a $3.21 million loss.
Planet Labs is up 389% since the beginning of the year, and at $19.43 per share, it is trading close to its 52-week high of $20.73 from December 2025. Investors who bought $1,000 worth of Planet Labs’s shares at the IPO in April 2021 would now be looking at an investment worth $1,963.
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