Planet Labs fell 78% from its June high, and at $11.37 the price still asks for more growth than my bull case, so hold and do not add

In early June Planet Labs traded as high as $51.76. On November 5 it closed at $11.37, down 10% on the day and 78% from the peak. Along the way the company reported its best quarter ever, revenue up 58%, raised its full-year outlook and kept growing its defense business by more than 90%. The stock fell anyway, and the question now is whether it fell far enough.

My answer is no. The Base value is $1.67 a share, 85.3% below the price. The Bull value is $7.92, still 30.4% below it, and in my Bear case the value per share is below zero, which I show as $0. I assign no probabilities to the cases. The verdict is Hold, do not add, with no buy price for now.

Valuation route: a satellite data company that is turning into a defense supplier, with subscription revenue, satellite sales to governments and heavy spending on new satellites. The valuation is a ten-year free cash flow model in which stock pay and capital spending both count in full. A revenue multiple is shown as a check, not averaged in, because it cannot say whether the business will ever cover those costs. Planet's fiscal year ends on January 31, so fiscal 2027 runs from February 2026 to January 2027. Values are present fair-value estimates, not 12-month price targets.

What Planet Labs is

Planet operates the largest fleet of Earth imaging satellites, a few hundred shoebox-sized Doves and SuperDoves that photograph the entire land surface of the planet every day, plus the sharper Pelican satellites and the Tanager hyperspectral satellites. It sells the imagery, the archive and increasingly AI analysis of it on subscription. 98% of its annual contract value is recurring.

The business has changed fast. Defense and intelligence customers were 70% of second quarter revenue. Planet now also sells "satellite services": it builds and operates Pelican satellites for a government customer, such as the Swedish Armed Forces, and sells the data on top. That brings big contracts, cash paid in advance and some revenue booked all at once when a satellite is handed over. It also brings hardware margins and a factory in Berlin.

The latest results

It was a record quarter, but 12% of revenue was booked at a single point in time, mostly the handover of the first Pelican to Sweden, against 1% a year earlier. That is why management guided the third quarter to only $101 to $105 million of revenue with an adjusted EBITDA loss of $1 to $6 million. For the full fiscal year 2027 it expects $430 to $441 million of revenue, 40% to 43% growth, adjusted EBITDA of just $3 to $10 million and capital spending of $100 to $115 million.

Two numbers moved the wrong way. Backlog fell from $900.4 million in January to $814.9 million in July, and three customers made up 17%, 11% and 10% of quarterly revenue. Management points to a pipeline of more than $4 billion of satellite services opportunities; the backlog has to start showing it.

Which numbers to trust

• Reported free cash flow is real cash, but much of it is customers paying in advance. In fiscal 2026 Planet made $134.4 million of operating cash flow and $52.9 million of free cash flow. In the first half of fiscal 2027, $47.1 million of the $68.4 million operating cash flow came from deferred revenue, prepayments for work not yet delivered. Deferred revenue reached $298.6 million in July, about 69% of a year's revenue.
• Stock-based pay is large. It was $55.0 million in fiscal 2026 and runs at about 16% of revenue this year, several times adjusted EBITDA. I deduct all of it. Fiscal 2026 free cash flow minus stock pay was about zero, before counting the prepayments.
• Capital spending has doubled. New Pelicans, the next-generation Owl satellites and the Berlin factory push capex to about 25% of revenue this year. I assume it falls to 9% over ten years, which is generous for a business that has to replace satellites every few years.
• Net loss is distorted by warrants. The six-month net loss of $148.2 million includes a $106.5 million accounting loss on warrants that have since been exercised. I ignore it.

To keep the prepayments from counting twice, I treat the deferred revenue above a normal 30% of revenue, about $168 million (my estimate), like debt: that revenue will be booked over the next quarters without new cash coming in.

Cash, debt and shares

Planet is not short of money. At July 31 it held $865.4 million of cash and short-term investments against $460 million of convertible notes due 2030 at 0.50%. The notes convert at about $11.95, almost exactly today's price, and capped calls offset dilution up to $18.04. I treat them as debt and assume the third quarter used about $40 million of cash (my estimate). After the deferred revenue adjustment, net cash is $197.5 million.

The share count is what has hurt per-share value. Weighted shares rose from 304.1 million to 359.6 million in a year as warrants were exercised (11.1 million shares in February to April) and stock was sold through an at-the-market program, 3.8 million shares at about $32 in the second quarter. With the first quarter results in June, Planet set up a program to sell up to $1.5 billion of stock over time; the June sell-off started there. On August 27 there were 363.85 million shares, 340.4 million Class A and 23.5 million Class B, which carry extra votes and are held mainly by the founders. Sales after that date will show up in the December report.

Primary valuation: ten years of free cash flow

The Base starts at fiscal 2028 revenue of $530 million, 22% above the midpoint of this year's guidance, and then grows 20% a year slowing to 6% by fiscal 2037. That is 13.2% a year for the decade: well below this year's 40% plus and fiscal 2026's 26%, but sustained for ten years, which few companies manage.

The adjusted EBITDA margin rises from 3% to 27%, stock pay falls from 15% to 6.5% of revenue and capex from 19% to 9%. Tax is zero until about $1 billion of past losses is used up (my estimate), then 24%. Working capital takes 10% of each extra dollar of sales. I discount at 10.5% a year with 3.5% growth after fiscal 2037.

Free cash flow after stock pay turns positive only in fiscal 2033. The present value of the rest of fiscal 2027 is -$41.6 million and of fiscal 2028 to 2037 -$225.8 million, so everything rests on the years after 2037, worth $676.6 million today. Enterprise value is $409.2 million. Add $197.5 million of net cash and the equity is worth $606.7 million, or $1.67 a share.

Changing the discount rate or long-term growth does not rescue the price:

Secondary check: a revenue multiple

The market prices Planet on revenue, so here is that view. At 6.0 times my fiscal 2028 revenue, the shares would be worth $9.28; at 3.5 and 9.0 times, $5.35 and $14.64. Today's price is 7.4 times that revenue and 9.0 times this year's guidance. I did not build a dated peer comparison for this analysis, so these multiples are judgment, anchored to Planet's own range: market value of about 31 times sales in early June and 10.9 times trailing revenue now.

The gap between $1.67 and $9.28 is not about revenue. Both use the same forecast. It is about what that revenue earns after capex and stock pay, which the multiple does not ask.

History

Planet went public through a SPAC merger in 2021 and spent most of 2023 and 2024 below $5. The rally to $51.76 came with the defense contracts, the satellite services deals and the run-up to the SpaceX listing in June 2026; the fall came with the $1.5 billion stock sale program, lower margin guidance, higher capex and, according to some commentators, investors switching from Planet into SpaceX. Earnings-based checks such as the growth-adjusted price to earnings ratio do not apply, because earnings and free cash flow per share after stock pay are negative.

Valuation triangulation

• Cash flow model (the only weighted method): $1.67.
• Revenue multiple, shown as a check: $5.35 to $14.64 across the cases, $9.28 in the Base.
• Base value: $1.67.
• Even the revenue multiple does not produce a buy: $9.28 less a 42.5% margin of safety is $5.34. The method changes how expensive the stock looks, not the decision.

What is the market already pricing in?

With the margins of my Bull case, 35% adjusted EBITDA, stock pay at 5.5% and capex at 8% of revenue, the price needs revenue to grow about 23% a year for ten years, from $435 million this year to about $3.5 billion. With Base margins it needs 35% a year. Planet has grown that fast for one year, helped by satellite handovers. Ten years is a different promise.

A different way to look at it: if the market keeps paying 7.4 times forward revenue, the Base gives about 13.1% a year to January 2030, after dilution from stock pay. That return comes entirely from the multiple holding while growth slows to 16%. My Base is worth 1.3 times forward revenue at that point.

Bear, base and bull scenarios

• Bear: satellite services stay lumpy, backlog keeps shrinking and growth falls to 12% and then 4%. Capex comes down faster, to 8% of revenue, because the growth projects stop, but margins only reach 19%. Revenue is about $1.0 billion in fiscal 2037 and the model value is -$0.53 a share, shown as $0.
• Base: as described above, $1.5 billion of revenue in fiscal 2037.
• Bull: the $4 billion pipeline converts, more governments buy constellations, and data on top lifts margins to 35% with stock pay at 5.5% and capex at 8%. Revenue reaches $2.4 billion in fiscal 2037.

The discount rate is 10.5% in all three. Revenue multiples of 3.5, 6.0 and 9.0 times would give $5.35, $9.28 and $14.64; they are references, not part of the values.

How the buy price is set

Confidence C carries a 42.5% margin of safety. Applied to the Base it gives $0.96, and I do not publish that as a buy price. A third of the Base is net cash, and the rest is a small operating value that moves a lot with assumptions nobody can pin down yet: three points of long-term margin change it by $0.76, two points of capex every year by $0.68, a point of discount rate by $0.39 to $0.53. A buy price for Planet has to come from a business that shows it can pay for its satellites and its stock awards, not from a percentage off a number this close to zero.

For reference, other single-input effects: two points of growth every year move the Base by $0.30 to $0.35, one point more stock pay every year by -$0.33, and $100 million of extra net debt by -$0.27. If stock pay were ignored completely, which I do not accept, the Base would be $4.25 and the Bull $11.06, roughly the price. Without the deferred revenue adjustment, the Base is $2.13.

For scale, the expected return under my Base is about 8.5% a year at $3, 7.0% at $5, 5.9% at $8 and 5.3% at today's $11.37, all below the 10.5% cost of capital.

Dividend

No dividend and no buyback. Planet sells shares rather than buying them.

Reasons to own Planet Labs

• Record second quarter revenue of $116.1 million, up 58%, with defense and intelligence up more than 90%.
• Backlog of $814.9 million, about half expected within twelve months, and a pipeline management puts above $4 billion.
• Reported free cash flow is positive, $21.3 million in the first half, and cash of $865 million is almost twice the convertible debt.
• The convertible notes cost 0.50% a year until 2030, with capped calls to $18.04.
• A daily image of the whole planet going back years is hard to copy, and governments are paying for sovereign constellations.

What could go wrong?

• Dilution. Stock pay of about 16% of revenue, a $1.5 billion stock sale program and 18% more weighted shares in a year.
• Capex. About 25% of revenue this year. If it stays above 15%, the Base is too generous.
• Lumpy, concentrated revenue. Three customers were 38% of the second quarter, and the third quarter is guided below the second.
• Government budgets. Defense and intelligence is 70% of revenue, and contract timing drives the quarters.
• Competition from Maxar, BlackSky, Airbus and newer constellations, and investors comparing every space stock with SpaceX.
• Backlog fell by $85.6 million in six months.

Management execution

• Fiscal 2027 revenue guidance went from $415 to $440 million in March to $430 to $441 million in September.
• The first Pelican for Sweden launched about four months after the contract was signed.
• Convertible notes at 0.50% with capped calls, raised in September 2025, gave the company years of funding.
• The $1.5 billion stock sale program came weeks after the share price peak, and per-share results are still negative.
• The headline profit measure excludes stock pay of about 16% of revenue, and the free cash flow measure is flattered by prepayments.

On my ten-point management check (two points each), Planet scores 9 of 18 scored points; the buyback point does not apply. The company delivers contracts and raised money cheaply. Per-share value has not followed.

Stock Analyza scorecard

The valuation score is 0 of 100.

A zero means every price test fails at once, not that the business is worthless. Business quality and valuation are shown separately and are not averaged.

Confidence score

The grade measures how well the model is identified, not the chance of a loss.

What I would watch from here

The third quarter report, expected around December 8, comes first: revenue inside $101 to $105 million, an adjusted EBITDA loss no worse than $6 million, capex inside guidance and, above all, how many shares were sold since August. In March, the fiscal 2028 guidance has to show revenue above about $530 million with positive adjusted EBITDA and capex falling below 20% of revenue.

The three most important thesis breakers

1. Fiscal 2028 guidance with revenue above $560 million, positive adjusted EBITDA and capex below 15% of revenue, which leads toward the Bull.
2. Backlog falls again and growth drops below 15%, which leads toward the Bear.
3. Heavy use of the $1.5 billion stock program at prices near today's, which lowers the value per share in every case.

Stress test and independent check

I rebuilt the Base cash flow model in a second, separately written script, together with the price ladder and the multiples, and the results match to the cent. That checks the arithmetic, not the forecasts.

The weakest point is that the whole value sits after fiscal 2037, so a few points of long-run margin or capex move it by half. That uncertainty cuts both ways, but even generous inputs stay far below the price. The strongest bull argument is that governments are starting to buy entire constellations, and Planet is one of very few companies that can build and run them. The strongest bear argument is that this makes Planet more of a hardware and services contractor, with lower margins and more capital tied up, at exactly the moment it is selling shares to fund it.

Final verdict: hold at $11.37, do not add

Planet Labs is a better business than it was two years ago. More customers depend on it, contracts are larger and the defense demand is real. But the stock is priced for a company that already makes money after paying for its satellites and its people, and Planet does not yet. A 78% fall made it cheaper. It did not make it cheap.

Verdict: HOLD at $11.37, do not add. Base $1.67, 85.3% below the price, Bear $0, Bull $7.92, Confidence C (13.75/25). Required margin of safety 42.5%, no buy price.

New money waits for proof rather than for a number. For an existing holder the original cost is irrelevant; the question is whether you expect about 23% growth a year for a decade with bull-case margins, because that is what $11.37 assumes. The report that would change my mind is a fiscal 2028 plan where capex falls toward 15% of revenue while growth stays above 25%.

Sources

Primary sources are Planet's second quarter fiscal 2027 results release (Form 8-K, September 3, 2026), its Form 10-Q for the quarter ended July 31, 2026, the fourth quarter and fiscal 2026 results release (Form 8-K, March 19, 2026), the second quarter earnings call (September 3, 2026) and the convertible notes closing release (September 12, 2025). All filings are on SEC EDGAR.

The reference market price is $11.37, the November 5, 2026 close. Context on the June 2026 sell-off and the stock sale program comes from The Motley Fool.