Planet Labs (PL, Financial) shares experienced a significant decline, dropping 11.32% to $3.76. The decline was primarily driven by the company's latest earnings report, which fell short of expectations.
Planet Labs reported a loss of $0.08 per share for its fiscal 2025 fourth quarter, contrary to analysts' expectations of a $0.02 per share loss. Sales for the quarter were $61.6 million, also missing the anticipated $61.9 million. On a GAAP basis, the loss was steeper at $0.12 per share, reflecting a $0.06 impact from changes in the fair value of warrant liabilities.
For the full fiscal year 2025, Planet Labs recorded an 11% increase in sales, reaching $244.4 million. However, this was accompanied by a loss of $0.42 per share. Despite the setbacks, the company managed to improve its gross profit margins, achieving 57% for the year and over 62% in the fourth quarter.
In a promising development, Planet Labs secured a subcontract in a $95 million deal with the California Air Resources Board awarded to Carbon Mapper. The specific contribution to Planet Labs' revenue remains undisclosed, and as a multiyear contract, annual earnings will not total the full $95 million.
Looking ahead, Planet Labs forecasted fiscal 2026 revenue to range between $260 million and $280 million. The midpoint of this range slightly undercuts Wall Street's expectation of $272 million.
On the valuation front, Planet Labs currently holds a GF Value rating categorized as 'Significantly Overvalued', with a GF Value of $2.66. For more details, refer to the GF Value page.
Financially, Planet Labs shows strengths and weaknesses. Despite its strong financial strength indicated by a rank in balance sheet strength, there are notable concerns with its financial metrics. The company holds a high equity-to-asset ratio of 0.74, reflecting good financial leverage but is under some financial stress with an Altman Z-score of 2.08, which hovers in the gray area. The revenue per share has shown a decline over the past three years, marking an area for caution.
