Planet Labs’ stock has exploded higher in recent months, reflecting optimism over the company’s business with government agencies and the promise of new, advanced satellites. And the rally may not be over.
Wedbush analyst Dan Ives, a noted tech bull, is raising his price target on the stock to $28 per share from $20, citing “significant demand” for Planet Labs’ satellites and data in U.S. as well as foreign markets. The new target is more than 9% higher than current levels.
The stock has skyrocketed 588% over the past 12 months and currently trades at more than $25 per share.
Ives’ optimism comes after the company said Monday that it has been awarded a nine-figure, multiyear deal to provide Sweden’s military with satellites, space-based data and awareness solutions. The deal gives Sweden ownership of the satellites.
It’s Planet Labs’ third deal in 12 months that focuses on providing these sorts of services to governments. The company added that its deals with Sweden, Germany and Japan’s JSAT are together worth more than $500 million.
The company also has a number of contracts with the U.S., including a $13.5 million deal to provide data to NASA and a $7.5 million deal doing work for the Navy. It tripled its backlog to $734 million in its fiscal third quarter relative to a year earlier.
“We continue to believe that the company provides mission-critical use cases for a wide array of government applications, especially defense and intelligence,” Ives said in a Monday note to investors.
Later this year, Planet Labs aims to demonstrate new satellites that it expects to deliver higher-resolution images analyzed by artificial intelligence in under an hour. The Owl satellites will be capable of helping customers with disaster-relief efforts, intelligence gathering and military responses, according to the company.
Revenue from its contract with Sweden will be recognized over several years and does not impact its previous financial guidance for its fourth quarter, Planet Labs said. The company expects to report between $76 million and $80 million for that quarter, up from $61.6 million a year earlier.
Planet Labs was one of several space companies that went public in 2021 through a special-purpose acquisition company, alongside the likes of Rocket Lab and Redwire. That transactionvaluedPlanet Labs at about $2.8 billion. It currently has a market capitalization of about $8 billion.
Google parent Alphabet is the largest owner of Planet Labs stock, with a nearly 11% stake in the company, according to FactSet. The two companies are also working together on Project Suncatcher, Google’s experimental plan to develop constellations of solar-powered satellites carrying Google’stensor processing units.
Those constellations would essentially function as AI data centers, which some think could provide massive amounts of cheap energy and mitigate the potential of an AI-fueled energy crisis. Google plans to send two prototype satellites into orbit by early 2027 to test its hardware.
“As use cases for solar data applications significantly rise through increased AI integrations, we continue to believe [Planet Labs] is well-positioned at the intersection of space and AI to capitalize on this rapidly growing market,” Ives said.
