Planet Labs (PL) has signed a string of high-profile deals and seen its stock surge nearly 50% over the past year. But a recent downgrade highlights a deeper problem: profitability is still out of reach.
The San Francisco-based satellite imaging company — founded in 2010 by two former NASA scientists — runs the world’s largest fleet of Earth observation satellites.
Its platform captures daily images to help governments and businesses track environmental and geopolitical changes in real time.
Despite momentum in the growing space economy, Planet Labs remains stuck in the red. And in a high-rate, low-liquidity environment, that’s becoming harder to ignore.
Goldman Sachs analyst Noah Poponak downgraded the stock from Buy to Neutral in April and slashed his price target to $3.50 from $6.00, citing persistent losses and growing macro risks.
While Poponak still sees long-term potential, he notes that Planet Labs is projecting continued losses in 2025. And if the economy slips into recession, he warned, the red ink could spread.
That’s a U-turn from last fall, when Poponak maintained a bullish view and highlighted progress on the company’s Tanager and Pelican satellite programs, initiatives he once expected would drive profitability.
Shares of PL closed at $3.35 on Thursday. The stock is down 17.1% year-to-date, though up 47.6% over the past 12 months.
Big contracts, small profits
Planet Labs delivered its first quarter of adjusted EBITDA profitability in Q4, reporting a $2.4 million profit compared to a $9.8 million loss the year prior.
For the full year, the company narrowed its adjusted EBITDA loss to $10.6 million, down from $55.3 million in 2024. Q4 revenue came in at a record $61.6 million, a 5.5% increase year over year.
“Looking ahead, we are focused on driving growth in our core markets with solutions, and see a clear path to at least double our revenue growth rate in FY’27 compared to FY’26,” CEO and co-founder Will Marshall said in a statement.
He added that the company saw a “significant increase” in its contract backlog last quarter.
In March, it was named a subcontractor on a $95 million multi-year deal under the California Air Resources Board’s Satellite Data Purchase Program (SDPP).
That same month, it inked a deal with the European Space Agency to support Greece’s National SmallSat Programme, and just last week it signed a three-year contract with EMDYN, a European intelligence and security services firm.
Despite near-term concerns, some institutional investors remain bullish.
In its Q4 investor letter, ArrowMark Partners disclosed an increased stake in Planet Labs through its Meridian Funds, citing the company's 200+ satellites and proprietary dataset as key differentiators.
The firm also said Planet’s “cost-effective and efficient imagery solutions” are well-positioned to win more business under the Trump administration’s push for government efficiency, particularly in the defense sector.
“We increased our position during the quarter, confident in Planet Labs’ capacity for sustained growth,” ArrowMark wrote.
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