Why Planet Labs Stock Just Rocketed

Planet Labs stock finally looks like a solid buy.Earth observation satellite company Planet Labs (PL +34.78%) stock rocketed 32.5% through 11:10 a.m. ET Thursday morning, after beating analyst forecasts for both sales and earnings last night. Heading into the fiscal Q3 2026 report, analysts weren't optimistic, expecting Planet to lose $0.04 per share on $72 million in sales. Instead, Planet broke even -- zero cents lost, zero cents earned -- and scored $81 million in revenue. Image source: Getty Images. Planet Labs Q3 earnings Planet Labs grew its sales 33% year over year -- and tripled its backlog, suggesting even more revenue growth lies ahead. "We're seeing strong traction with our AI-enabled global monitoring solutions," said CEO Will Marshall, and the company's pivot away from environmental science activities and toward military and security contracts is bearing fruit, as "demonstrated by our recent award under the NGA's Luno B program and expansion with NATO." Best of all, as CFO Ashley Johnson pointed out, Planet Labs just reported its "third consecutive quarter of positive free cash flow." ExpandNYSE: PLPlanet Labs PBCToday's Change(34.78%) $4.50Current Price$17.44Key Data PointsMarket Cap$4BDay's Range$15.03 - $17.5952wk Range$2.79 - $17.59Volume1.7MAvg Vol11MGross Margin58.96%Dividend YieldN/A Is Planet Labs stock a buy? I don't know about you, but this is the number I'm focused on at Planet Labs. GAAP-unprofitability notwithstanding, year to date, Planet has now generated $58.6 million in positive free cash flow, or $55.2 billion if you count "capitalized internal-use software" as a capital expense (which I do). Annualize that number, and the company's on course to report its first-ever year of positive free cash flow, perhaps as much as $73.6 million.Advertisement Is that enough to make Planet Labs stock a buy? Valued at $5.25 billion today, it gives the stock a price-to-free cash flow ratio of about 71. Expensive? Yes. But assuming FCF continues growing even faster than the 33% pace of sales growth, then yes, I believe Planet stock may be a buy.About the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolRead NextOct 3, 2025 •By Courtney CarlsenHere's Why Planet Labs Stock Rocketed 83% Higher in SeptemberSep 12, 2025 •By Eric VolkmanWhy Planet Labs Stock Rocketed Almost 50% Higher This WeekSep 9, 2025 •By Rich SmithWhy Planet Labs Stock Sank TodaySep 8, 2025 •By Rich SmithWhy Planet Labs Stock Went to the Moon TodayJun 5, 2025 •By Rich SmithWhy Planet Labs Stock Shot to the Moon TodayMar 24, 2025 •By Rich SmithWhy Planet Labs Stock Bounced Back Monday