Planet Labs (PL, Financial) saw a slight decrease of 0.11% in its stock price today despite the announcement of a contract expansion. This contract enhances the company's existing relationship with the Antinarcotics Directorate of the Colombian National Police, providing satellite imagery for detecting and eradicating illicit crop growth. Although this development could potentially increase revenue, the lack of disclosed contract value suggests it might not have a significant impact on the company's financials.
Planet Labs' satellite technology is capable of observing agricultural areas with a resolution of approximately three meters, zooming in to 50 centimeters to identify coca crops. The company, which has been providing such data to Colombia since 2017, hopes this contract will broaden the scope of its data services. However, without specific financial details, the market remains cautious about the contract's revenue potential.
This contract announcement is Planet Labs' third in two weeks, with previous agreements valued in the "six figures" and "seven figures" range. The omission of a value estimate for the DIRAN contract could imply a smaller deal, potentially lacking the strength to substantially influence Planet's yearly revenue figures.
From a stock analysis perspective, Planet Labs is currently trading at $4.395 with a market capitalization of approximately $1.29 billion. The stock's Price-to-Book ratio (PB) stands at 2.73, and the Price-to-Sales (PS) ratio is 5.5, which is close to its one-year high. The company is also marked as "Significantly Overvalued" according to the GF Value, with a GF Value of $2.69, suggesting potential downside risk in the stock price.
Investor sentiment is mixed as the stock's historical performance shows a 74.29% year-to-date increase, yet significant volatility with a beta of 1.62. The absence of earnings, reflected in a negative earnings per share (EPS) of -$0.47, further complicates the valuation.
Financial metrics reveal that Planet Labs is experiencing some financial distress with an Altman Z-score of 1.87, which hovers in the grey area. Furthermore, the company's revenue per share has been declining over the past three years. Despite these challenges, Planet Labs has a strong interest coverage ratio and is unlikely to be a financial manipulator, as indicated by a Beneish M-Score of -3.03.
Investors are now looking forward to the upcoming Q3 earnings report on December 9, where analysts forecast a 14% year-over-year revenue increase to $63.1 million. However, earnings are expected to remain negative at an estimated loss of $0.04 per share. The current stock movement reflects investor impatience as they await more robust results.
