Shares of Planet Labs, a company focused on Earth-imaging satellites, jumped 36.6% in afternoon trading after they announced impressive third-quarter results and a positive forecast.
The company reported quarterly revenue of $81.25 million, reflecting a year-over-year increase of 32.6%, and adjusted earnings per share of zero. This was better than Wall Street’s expectations, which anticipated a loss of $0.04 per share on revenue of $72.13 million. Notably, Planet Labs also achieved positive free cash flow, recording a loss of $911,000, compared to a loss of $3.56 million during the same period last year. For the upcoming fourth quarter, they provided an optimistic sales projection of $78 million at the midpoint, surpassing the consensus estimate of $73.39 million.
Additionally, the company raised its full-year adjusted EBITDA outlook to $7 million, a significant improvement from analysts’ earlier projections anticipating a loss of $3.21 million.
Now, one might wonder if this is the right time to invest in Planet Labs.
Planet Labs’ share price has been quite unstable, experiencing 59 movements exceeding 5% in the last year. However, such a substantial shift is unusual for the company, indicating that the recent news significantly altered market perceptions.
The last notable movement occurred 17 days ago, when the stock gained 2.6% amid renewed excitement around Alphabet, which was revitalizing the artificial intelligence sector and prompting a market rally as Thanksgiving approached.
During that period, the Nasdaq index experienced a rise of 2.6%, while the S&P 500 increased by 1.6%, largely propelled by a 5% jump in Alphabet’s stock following the announcement of its upgraded Gemini 3 AI model. This positivity spilled over into the overall tech sector, significantly boosting companies like Broadcom, Micron, and Palantir. This rally was further supported by comments from the New York Fed president about the possibility of a rate cut in December, enhancing momentum from earlier trading sessions.
Since the start of the year, Planet Labs’ stock has soared 352%, reaching a new 52-week high of $17.96 per share. Investors who purchased $1,000 of Planet Labs stock during its IPO in April 2021 are now looking at an investment worth $1,814.
Interestingly, major players like Microsoft, Alphabet, Coca-Cola, and Monster Beverage all started as average growth stories before capitalizing on significant trends. We’ve identified some businesses in a similar phase, particularly a potentially lucrative AI semiconductor sector that seems to remain under Wall Street’s radar.
