Three Reasons To Rethink Planet Labs Stock

Planet Labs (PL) stock has fallen 49% in three months, while the S&P 500 rose 2.7%. Even after that fall, buyers pay 16.6 times the company's sales, against 3.0 for the index. They are paying for growth, and Planet's revenue rose about 58% from a year earlier in its latest quarter. That figure deserves a closer look before you buy or add. So where did that growth come from?

Defense Customers Lead Planet's Growth

Revenue from defense and intelligence customers grew more than 90% from a year earlier in fiscal Q2 2027, the latest quarter. Revenue from commercial customers grew more than 15%, so defense customers are setting the pace.

Part of that defense revenue is a newer kind of sale, in which Planet builds a satellite and hands it to a government that then owns it. In fiscal Q2, it handed over the first Pelican satellite for the Swedish Armed Forces. Management said that handover was the main reason for the quarter's revenue outperformance.

Planet books a sale like that all at once on delivery, not month by month like a data subscription. Revenue booked that way was 12% of the total in the quarter, against 1% a year earlier, and management expects the share to vary from quarter to quarter. Planet's forecast for fiscal Q3 2027 is revenue of $101 million to $105 million, below the $116 million it reported for Q2, though management said the midpoint is about 27% growth from a year earlier.

Planet's Contracted Work Is Rising Far Less Than Revenue

At the end of fiscal Q2 2027, Planet had about 9% more contracted work still to deliver than a year earlier. That is far slower than revenue grew. On the September 3 call, management said that Planet is delivering on its larger contracts, which turns orders into revenue. It added that Planet is exploring new markets, where the first deals are short pilots.

The best case for owning the stock is that much bigger orders are on the way. Management says it has identified over $4 billion of opportunities for satellite services, and it counts over 25% of them as near-term. Those are deals Planet is pursuing, not deals it has signed, and how many will close is still open.

Has Planet Stock Fallen Further Than The S&P 500?

Planet Labs stock has fallen further than the S&P 500 in recent market shocks. In the 2025 tariff shock, it fell 47%, against 19% for the index. In the 2023 shock over bond yields, it fell 39%, against 9.5%. In the 2022 inflation shock, it fell 36%, against 24%.

In exchange for those falls, holders have had growth: Planet's revenue grew 22.7% a year on average over the last three years, against 5.8% for the S&P 500. But Planet still runs an operating loss, so growth is most of what a holder has to go on.

A holder who sits through falls like those is counting on the growth to continue, and that may take new orders. Planet reports fiscal Q3 2027 next. If its contracted work grows clearly faster than the roughly 9% in Q2, that would be a sign that new orders are arriving.

How To Act On PL?

Now you know PL better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.

There is a smarter choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking.

If you'd rather act on PL itself:

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