Analyst Justifies Premium Price Target For Planet Labs On Robust Imagery Archive And Expanding Market Opportunity

JMP Securities analyst Trevor Walsh reiterated a Market Perform rating on the shares of Planet Labs PBC PL with a price target of $5.50.

Despite some of the challenges experienced in the most recent earnings release and lowered expectations, the analyst feels management is confident in Planet’s overall positioning, ability to execute, and path to profitability.

Despite the more immediate headwinds identified in F1Q24, the analyst continues to like Planet for several reasons including attractive valuations, resilient fleet of more than 200 satellites providing expansion opportunities, and a proprietary data backbone for AI complemented by strong capabilities and technical advancements in highly accurate geospatial imaging analysis.

Diversified revenues across D&I, civil government, and commercial and a large and expanding market opportunity that the analyst believes the company is well positioned to tackle as the de facto leader in the space.

The analyst’s $5.50 price target implies a multiple of 4.2x, a 35% premium to the Satellite/A&D peer group mean multiple of 3.1x.

The premium is warranted due to PL’s one-to-many, software-like business model, competitive moat generated by a robust imagery archive dataset, and strong positioning in an expanding market opportunity, noted the analyst.

Price Action: PL shares are trading lower by 2.53% at $3.08 on the last check Friday.