What’s Happening With Planet Labs Stock?

December 12th, 2025 by Trefis Team
PL: Planet Labs PBC logo
PL
Planet Labs PBC

For years, Planet Labs (NYSE: PL), a San Francisco–based Earth-imaging and geospatial analytics company, has been a “cool tech, bad stock” story. Investors loved the idea of a company taking daily photos of the entire Earth, but they hated the financials: slow growth, high burn, and government dependency. It traded like a commoditized satellite operator.

On Thursday, that narrative changed dramatically.

With the stock jumping 35% to $17.47, Planet Labs has broken out of the “Space Sector” and entered the “AI Infrastructure” VIP club. It is now trading at a premium – 18x Forward Sales – a valuation reserved for the elite tier of software monopolies.

Why pay 18x sales for a company with $250 million in revenue? Because the Q3 earnings report revealed a single, game-changing metric: a 361% ramp up in Backlog (RPO) to $672 million.

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Let’s analyze why Wall Street is suddenly willing to pay a “Perfect” price for this asset. That being said, if you seek an upside with less volatility than holding an individual stock like PL, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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Photo by susan-lu4esm on Pixabay

The Thematic Shift: From “Pictures” to “Proprietary Data”

The market doesn’t pay 18x revenue for satellites. It pays 18x revenue for Scarcity.

  • The “Hardware” Trap: Previously, PL was valued on the cost to launch rockets.
  • The “Data” Breakout: The massive backlog jump confirms that Hyperscalers (like Google) are treating Planet’s daily Earth scan as a Finite Resource.
  • The Thesis: In the AI era, proprietary data is the new oil. You can scrape the internet for free, but you cannot scrape the physical planet without Planet Labs. The market is repricing the stock because it views Planet not as a vendor, but as a Data Monopoly with no viable alternative for training geospatial AI models.

The Valuation Sanity Test: Pricing in “Hyper-Growth”

At $17, the “Value” argument is gone. This is a “Momentum” trade.

  • The Math: Trading at 18x Sales puts Planet Labs in the same basket as Snowflake and CrowdStrike.
  • The Justification: To justify this price, you have to believe revenue will accelerate from 30% growth to 40-50% growth next year.
  • The Signal: The $672M backlog (which is nearly 3x current annual revenue) provides the mathematical bridge to that growth. Investors are aggressively front-running the revenue recognition. They are betting that this backlog will convert into a massive revenue ramp in 2026/2027, quickly compressing the multiple.

The Black Box: The “Temporal” Moat

Why did the backlog triple? It wasn’t just selling more pictures.

  • The Asset: The Archive.
  • The “Google” Deal: The inferred partnership isn’t just for today’s images; it’s likely for the history of images.
  • The AI Logic: To train an AI to predict crop failure or supply chain bottlenecks, it needs to see what happened before. Planet has a decade of daily scans. This “Time Machine” dataset is what commands the premium. A competitor launching satellites today has zero history. This Temporal Moat is what justifies the 18x multiple—you cannot replicate the past with capital.

The Risk: The “Perfection” Trap

When you buy a stock at 4x sales, you have a margin of safety. When you buy at 18x sales, you have execution risk.

  • The Danger: The stock is now priced for perfection.
  • The Backlog Conversion: If that $672M backlog takes 5 years to pay out instead of 2 years, the growth rate won’t spike fast enough to support the valuation.
  • The Volatility: Any quarter where “Billings” decelerates will result in a 20% plunge. This is no longer a sleepy stock; it is a high-beta battleground.

Our Take

Planet Labs has successfully transitioned from a “Space Stock” to a “Geospatial Intelligence Platform.” The market has awarded it the “AI Halo.”

  • Bull Case: The backlog is just the start. As more foundational models incorporate “Physical World” data, Planet becomes the standard data feed for the entire AI economy, growing into its valuation like Nvidia did in 2023.
  • Bear Case: The valuation has disconnected from reality. 18x sales for a company that is not yet GAAP profitable is a bubble. If the macro environment turns (rates rise), the multiple collapses back to 8x ($8 per share).

The Outlook: At $17, the easy money has been made. Buying here is a bet that Planet Labs is the “Palantir of Orbit.” If you believe in the “Physical AI” thesis, the premium is the price of admission. If you are a value investor, you missed the boat.

Remember, investing in a single stock without comprehensive analysis can be risky. Consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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