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Planet Labs (NYSE: PL) stock jumped 8.6% through 12:15 p.m. ET Monday — and it’s not hard to figure out why.
Over the weekend, war broke out among the United States, Israel, and Iran. Most denizens of the Interwebs have been glued to Google News and X over the weekend, searching for updates on what’s happening. More professional analysts, seeking an eagle’s eye view of developments, are likely turning to Planet and its fleet of approximately 200 Earth observation satellites for clear digital photographs of what’s happening on the ground.
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When Planet Labs first announced its IPO back in 2021, the company portrayed itself as something of a space hippie stock — to the extent it actually chose “public benefit corporation” as its corporate form. Boasting a constellation of satellites capable of covering every inch of Earth’s landmass at least once per day, Planet would monitor the progress of global warming, help fight forest fires, and “generate social and public good, and … operate in a responsible and sustainable manner.”
While laudable goals, this didn’t work out so well for Planet’s profitability.
More recently, Planet has evolved to focus more on winning defense and security contracts. Not only has this done wonders for Planet’s income statement. It’s also put Planet in the right place, at the right time, to help everyone from politicians to generals to investors understand what’s going on in the Persian Gulf right now.
While still not technically “profitable,” Planet generated more than $40 million in positive free cash flow last year, a number that’s bound to increase as demand for the company’s satellite images grows. Priced at more than 205 times FCF, Planet Labs mayn’t be a cheap stock.
But it’s certainly got potential.
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