Planet Labs (PL, Financial) stock experienced a significant drop of 3.34% today following its Q3 earnings report. This movement is attributed to a combination of missed sales expectations and better-than-anticipated earnings per share results. The stock currently trades at $3.905.
Despite a pro forma loss per share of $0.02, which was better than the anticipated $0.04 loss, Planet Labs reported sales figure fell short of expectations at $61.3 million against the forecasted $63.1 million. Under GAAP, the company reported a $0.07 loss per share.
On a brighter note, Planet Labs showcased notable improvement in its gross margins, increasing from 47% in the prior year's fiscal Q3 to 61% in fiscal Q3 2025. The company's non-GAAP gross margin now stands at 64%, with expectations to reach 65% in the next quarter. Initially, Planet Labs projected non-GAAP gross margins of 74% by fiscal 2026.
However, revenue growth remains a concern. The company originally projected $449 million in sales for fiscal 2025, aiming for a 55% growth rate. With year-to-date sales of $183 million and a Q4 forecast of up to $63 million, Planet Labs is on track to achieve approximately $250 million in sales this year, falling short of its initial goal by about $200 million. This indicates a subdued revenue growth rate of around 11% annually.
Evaluating its valuation, Planet Labs currently holds a GF Value label of "Significantly Overvalued" with a GF Value of $2.69. For more insights, you can check the GF Value for Planet Labs.
The company's market capitalization stands at $1.146 billion, and its price-to-book ratio is 2.43. While Planet Labs has a strong Beneish M-Score, indicating it is unlikely to be a manipulator, it exhibits warning signs such as a declining revenue per share and an Altman Z-Score that places it in the financial distress zone, with a score of 1.47.
Investors should closely monitor Planet Labs' financial health with caution due to its current financial strengths and vulnerabilities, especially given its proximity to a 1-year high in both stock price and PS ratio.
