Planet Labs (PL, Financial) stock surged 9.55% today, rising to $1.95. The uptick follows the announcement that the company has been selected to participate in NASA's Commercial SmallSat Data Acquisition Program (CSDA) On-Ramp1 Multiple Award contract, which is valued up to $476 million.
The contract, aimed at supporting NASA's Earth science research, will be distributed over four years and runs through November 2028. This equates to approximately $100 million annually. The total of $476 million is a ceiling value, and it will be divided among eight companies, including Planet Labs. The other companies involved are BlackSky, Satellogic, Teledyne (TDY), Iceye, Pixxel Space, The Tomorrow Companies, and Canada's MDA.
Given Planet Labs' extensive constellation of Earth observation satellites, the company is expected to receive a portion of this funding. This is significant for a company that reported only 14% sales growth last quarter.
Planet Labs (PL, Financial) is currently trading at $1.95 with a market capitalization of $572.28 million. Despite facing severe warning signs, such as a distressing Altman Z-score of -0.72, which indicates a potential for bankruptcy within the next two years, the company has some positive attributes. Its Beneish M-Score of -3.03 suggests that it is unlikely to be a manipulator, and it has a comfortable interest coverage ratio, indicating financial stability.
Additionally, Planet Labs' stock price is close to its three-year low, making it potentially attractive for value investors. Its Price-to-Sales (PS) Ratio is similarly near a three-year low at 2.17. Financial health indicators show that the company has a cash-to-debt ratio of 10.4 and a current ratio of 2.34, both suggesting decent liquidity.
On the valuation front, Planet Labs is rated as "Modestly Undervalued" with a GF Value of $2.63, reflecting the potential for upside. For more detailed analysis, you can refer to its GF Value.
However, it's worth noting that the company's stock has experienced a decline over various periods, with a year-to-date change of -22.47% and a 52-week change of -29.97%. Despite these drops, the recent contract win could provide a much-needed boost to its revenue and market sentiment.
In conclusion, while Planet Labs (PL, Financial) faces several financial challenges, its participation in the NASA contract and current undervaluation make it a stock worth keeping an eye on for potential future gains.
