Planet Labs (PL, Financial) announced its fiscal second-quarter 2025 financial results, which disappointed investors. The company reported a loss of $0.06 per share on sales of $61.1 million. These results were largely in line with analysts' expectations of a $0.06 loss on $61.8 million in sales.
Despite the results being close to predictions, investors expressed their disappointment by selling off the stock, resulting in a 21.53% decline in its share price. Consequently, the stock price now stands at $1.95.
Sales for the quarter grew 14% year-over-year for the period ending July 31. The gross profit margin according to generally accepted accounting principles (GAAP) rose to 53%, while the non-GAAP margin increased to 58%. However, this growth falls short of the promises made during the company's 2021 special purpose acquisition company (SPAC) IPO, which projected 44% annual sales growth and a 74% non-GAAP gross margin.
The company's CEO, Will Marshall, highlighted a shift toward defense and intelligence sales, which grew over 30% year-over-year. Planet Labs (PL, Financial) also projects non-GAAP gross margin growth to reach between 59% and 61% next quarter.
For fiscal Q3, Planet Labs expects revenue to grow to between $61 million and $64 million. However, analysts were hoping for at least $64.2 million, leading to further disappointment among investors.
From a valuation perspective, Planet Labs (PL, Financial) holds a GF Value rating of "Modestly Undervalued," with a GF Value of $2.71. You can explore more about the GF Value here.
Regarding its financial health, the company has a Piotroski F-Score of 4 indicating average financial health. There are warning signs such as an Altman Z-Score of 0.25, placing Planet Labs in the distress zone, suggesting a possibility of bankruptcy within the next two years. Additionally, its revenue per share has been declining over the past three years.
On the brighter side, Planet Labs (PL, Financial) has a Beneish M-Score of -3.2, which implies that the company is unlikely to be manipulating its financial results. Moreover, Planet Labs has enough cash to cover all of its debt, reinforcing a stable financial situation as per the interest coverage ratio.
Considering the broader spectrum of its performance metrics, the company has an operating margin of -69.88% and a net profit margin of -59.26%. These figures indicate that while sales are improving, profitability remains a significant challenge.
In terms of growth prospects, recent data indicates a 6.3% year-over-year revenue growth. With a market capitalization of $571.11 million and a price-to-book ratio of 1.13, the stock could present an opportunity for investors willing to take on higher risk.
Investors should weigh these financial factors and current stock valuations carefully before making any investment decisions regarding Planet Labs (PL, Financial).
