TLDR
- Planet Labs stock surged 7.2% on Friday absent any direct company news to catalyze the gain.
- KeyBanc analyst Michael Leshock released a note advising investors to purchase defense stocks, suggesting the Iran conflict might persist for up to eight weeks.
- Planet Labs has been prominent in conflict reporting this week, providing key satellite imagery.
- The firm instituted a 96-hour hold on new imagery of Gulf States to stop hostile entities from obtaining live data.
- A DCF valuation suggests a $1.99 per share intrinsic value for the stock, which recently traded at $25.28.
Planet Labs (PL) shares advanced 7.2% on Friday, March 6, without any official company statement to account for the increase. There were also no analyst upgrades or adjustments to price targets.
The probable cause? The continuing tensions with Iran and Planet Labs’ involvement.
KeyBanc analyst Michael Leshock distributed a note suggesting investors look at defense sector stocks. He indicated the Iran situation could escalate to a “boots on the ground” scenario, which would likely increase demand for military intelligence resources such as satellite imagery.
Planet Labs manages a fleet of approximately 200 Earth observation satellites, which can image locations multiple times daily. This positions it as one of the foremost suppliers of current imagery globally.
This week, news outlets relied on Planet Labs imagery to show destruction from drone strikes on Iranian assets, such as command centers and ballistic missile launch sites.
Secretary of Defense Pete Hegseth has stated the conflict might continue “four weeks, but it could be six, it could be eight.” This represents a potential entire quarter of heightened need for Planet Labs’ imaging services.
Planet Labs Delays Gulf State Imagery
Coinciding with the stock’s rise, Planet Labs declared a new 96-hour delay on fresh satellite images captured over Gulf States impacted by Iranian drone attacks.
In a client communication, the company described this as a “temporary” action reflecting its “commitment to responsible data practices and the safety of personnel on the ground.” It did not verify if US officials requested the measure.
Imagery of Iran was exempt from the delay. All new images of Gulf States and nearby conflict areas will be withheld before being added to Planet Labs’ archive.
“This measure is intended to prevent adversarial actors endangering the safety of allied and NATO-partner personnel and civilians there,” the company stated.
The company had earlier enacted a 30-day delay for imagery of Gaza.
Valuation Concerns Mount
Even with the stock’s robust performance — up 23.9% for the year and more than fivefold over the last twelve months — valuation experts are expressing caution.
Planet Labs last traded at $25.28. A discounted cash flow model based on projected free cash flows to 2035 estimates intrinsic value at merely $1.99 per share, suggesting the stock could be overvalued by more than 1,000%.
The stock’s price-to-sales ratio stands at 30.53x, compared to an industry average of 1.11x and a peer average near 1.00x.
Analysts with a bullish outlook assign a fair value of $33.00 per share, citing defense contracts, sovereign agreements, and AI-powered analytics as growth catalysts. Bearish analysts propose a fair value of $11.31, contending that most positive expectations are already reflected in the price.
Planet Labs receives a score of 0 out of 6 on Simply Wall St’s valuation assessment.
The stock concluded trading at $25.28 on March 7, marking a 4.7% increase over the previous week and a 13.6% gain over the past month.
