Planet Labs (PL) shares closed Thursday at $34.17, a gain of 11.23%, as traders rotated into commercial space stocks in anticipation of SpaceX's record-breaking initial public offering. The stock continued to edge higher in premarket trading Friday, reaching $34.73.
The rally coincided with renewed investor interest in the space sector after Reuters reported that SpaceX raised $75 billion in its IPO, pricing shares at $135 and achieving a $1.77 trillion valuation. The listing, expected to be the largest in history, has reignited speculation about the valuation of other space companies.
SpaceX IPO Lifts Sector Sentiment
SpaceX's debut on the Nasdaq is seen as a bellwether for the commercial space industry. Mark Klein, CEO and president of SuRo Capital, told Reuters that SpaceX's first-day trading performance could set new multiples for companies like Planet Labs and other space stocks. Investors are closely watching how the market prices SpaceX relative to its peers.
Planet Labs' Bull Case: Strong Revenue and Backlog
Planet Labs reported fiscal first-quarter revenue of $94.2 million, up 42% year-over-year. The company's backlog, representing business under contract but not yet recognized as revenue, jumped 72% to over $906 million. Adjusted EBITDA was a loss of $1.0 million, while cash, cash equivalents, and short-term investments stood at $730.8 million at quarter-end. CEO Will Marshall described the results as evidence of the "mission-critical nature of our data."
Bearish Concerns: Dilution and Losses
Despite the top-line growth, Planet Labs faces significant headwinds. The company's June 5 SEC filing allows it to sell up to $1.5 billion in Class A common stock through an at-the-market (ATM) program. This mechanism lets Planet issue shares at prevailing market prices, which could dilute existing shareholders and weigh on earnings per share.
Planet reported a GAAP net loss of $138.9 million for the first quarter, or $0.40 per share, partly due to warrant-liability revaluation. On a non-GAAP basis, the loss was $0.03 per share. The company's guidance for fiscal 2027 includes revenue of $425 million to $441 million and adjusted EBITDA profit of $0 to $10 million, underscoring the challenge of reaching profitability while investing in satellites and data infrastructure.
Valuation and Risks
At Thursday's close, Planet Labs had a market capitalization of approximately $11.8 billion, representing about 27 times the midpoint of its 2027 revenue guidance. This steep price-to-sales ratio leaves little room for error. Any negative news from SpaceX's IPO, a slowdown in defense or commercial orders, or adverse developments in the ATM program could trigger a sell-off.
Investors are now focused on Planet's ability to convert its record backlog into profitable growth. The company expects fiscal second-quarter revenue between $102 million and $107 million, with adjusted EBITDA ranging from breakeven to $5 million. Capital expenditures are forecast at $21 million to $27 million for the quarter.
Planet Labs' stock is moving largely on sector sentiment rather than company-specific news. While the bull case rests on defense contracts, recurring revenue, and AI-powered analytics, bears point to ongoing losses, high capital spending, and the risk of further share dilution. The coming days, particularly SpaceX's market reception, will likely determine the near-term direction for Planet and other space stocks.
