Planet Labs' Pivot To Solutions And AI Signals Long-Term Upside, Says Analyst

On Friday, Benchmark analyst Josh Sullivan reiterated the Buy rating on Planet Labs PBC PL, with a price forecast of $7.

Yesterday, the company reported fourth-quarter adjusted losses of 8 cents per share, missing the consensus of 2 cents. Revenue of $61.6 million, up 5% year over year, missed the consensus of $61.87 million.

Planet Labs expects revenue in a range of $61 million to $63 million for first-quarter FY26 and $260 million to $280 million for FY26.

The analyst highlights that the $230 million commercial agreement with JSAT, signed late last year, marked a pivotal shift for Planet Labs.

This strategic decision to sell JSAT satellite hardware directly, rather than relying on traditional data feeds from Planet Labs-owned satellites, is expected to significantly reduce PL’s cash burn by 50% in FY26, with a clear path toward positive free cash flow within the next two years.

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Once the JSAT constellation is fully deployed, Planet Labs will have the opportunity to sell data feeds to third-party customers, further boosting its margins, the analyst writes.

Sullivan further notes that the transition in FY25 toward solution-based products sets the stage for FY26, when Planet Labs plans to focus on leveraging its extensive satellite data library and AI products.

Additionally, Planet Labs anticipates strong growth in the commercial agricultural market as it enters FY26, with recent customer wins, renewals, and an increase in data usage from larger agricultural companies.

Price Action: PL shares are trading lower by 12.5% to $3.71 at last check Friday.

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