This Space Stock Is up 500%. Did You Miss Your Opportunity?

Planet Labs (NYSE:PL) is up 30% in morning trading today, touching almost $17 per share after crushing third quarter earnings. This unexpected growth highlights Planet Labs’ accelerating demand for its daily Earth observation data, fueled by artificial intelligence (AI) integrations in defense and commercial sectors. 

The quarter also marks the company’s fourth straight quarter of adjusted EBITDA profits, signaling a shift toward sustainable operations in the competitive space tech arena.

With the stock up more than 300% year-to-date in 2025, and a staggering 500% from its 52-week low near $2.90 per share, early investors have enjoyed a true four-bagger, but if you haven’t been on for the rocket ride, have you missed your chance?

What Was Inside the Q3 Report?

Planet Labs’ top-line hit $81.3 million, smashing Wall Street’s $72.2 million estimate and jumping 33% year-over-year. It was the company’s strongest growth rate in years. The robust results came from a string of high-value defense and government wins:

• $12.8 million U.S. National Geospatial-Intelligence Agency (NGA) award for AI-powered maritime surveillance (Luno B program)
• $13.2 million National Reconnaissance Office renewal for PlanetScope + Pelican imagery
• $13.5 million NASA environmental monitoring task order
• Multi-million-dollar expansions with the U.S. Navy, NATO, and an undisclosed allied ministry

Commercial traction also continued, with contracts from AXA (insurance), the State of Tennessee (wetlands), and several ag-tech customers. Management raised its full-year 2026 guidance to $297 million to $301 million in revenue (from $281 million to $289 million) and now expects $6 million to $8 million of adjusted EBITDA profit — the first full-year positive figure in company history.

The GAAP picture was messier, though. Net losses widened to $59.2 million from $20.1 million a year ago, driven by a $43.5 million non-cash charge from the change in fair value of warrant liabilities and higher operating spending on new satellites and AI development.

Adjusted EBITDA Profits — Real or Accounting Magic?

Planet Labs posted $5.6 million of adjusted EBITDA, its fourth consecutive profitable quarter on this metric. However, starting this quarter, the company retroactively removed changes in warrant liabilities from the adjusted EBITDA calculation. That single change accounted for roughly 80% of the year-over-year swing from loss to profit.

What happened was, when Planet Labs went public through a SPAC merger in 2021, it issued warrants that let holders buy shares at $11.50 per share. Accounting rules require marking those warrants to market each quarter. When the stock price rises sharply (as it has in 2025), the recorded value of the warrant liability increases, triggering a large non-cash expense on the income statement. Excluding it is standard industry practice, but it does make profitability appear stronger than if the old methodology were kept. 

Still, Planet Labs’ core gross profit and cash from operations are improving, but investors should watch whether operational (pre-adjustment) EBITDA can stay positive as warrant volatility fades.

Wall Street Sees More Upside

This morning, Needham & Co. analyst Ryan Koontz reiterated his Buy rating and lifted his price target from $16 to $22 per share, implying 70% upside from yesterday’s close (and still 30% above current levels). Koontz highlighted “exceptional execution,” accelerating bookings in defense and AI, and a credible path to Rule of 40 performance by fiscal year 2028.

The Rule of 40 is a combination of revenue growth and operating margin to evaluate the balance between growth and profitability. It is widely used as a benchmark in the software and technology sector. 

Key Takeaway

Planet Labs is no longer a speculative penny stock trading on hope. Strong 33% revenue growth, a $226 million cash balance, zero debt, and a growing roster of sticky government contracts give it real staying power in the $100 billion Earth-observation market. 

Although valued at almost 20x sales, it is not unreasonable for a company moving sharply toward sustainable profitability. Moreover, analysts forecast it will grow earnings at an eye-watering 88% rate for the next five years. It also happens to be Alphabet‘s (NASDAQ:GOOG | GOOG Price Prediction)(NASDAQ:GOOGL) holding in its hidden investment portfolio.

The warrant accounting noise is real but non-cash and diminishing over time. For growth-oriented investors comfortable with space-tech volatility, Planet Labs remains a buy even after the moonshot run. The opportunity hasn’t been missed — it’s just moved to a higher orbit.