Why Shares of Planet Labs Are Plunging Today

Before today's trading session began, shares of Planet Labs (NYSE:PL) were in the black for 2024, having risen more than 3%. Today, however, the stock finds itself in the red for the year. With the company reporting disappointing fourth-quarter 2024 financial results after the market closed on Thursday and unfavorable attention from a Wall Street analyst today, investors are trimming -- or exiting altogether -- their positions in this satellite imaging stock.

As of 2:07 p.m. ET, shares of Planet Labs are down 11.2%.

Record revenue isn't enough to quell investors concerns

With markets closed on Friday, investors had to wait until today to express their disapproval of the Q4 2024 financial results that Planet Labs reported. Although the company posted record quarterly revenue of $58.9 million, it was only slightly better than the $58.2 million that analysts had expected the company to report. The bottom line of the income statement, moreover, provided cause for concern. The consensus among analysts was that the company would post earnings per share of negative $0.06, but the company reported a steeper loss of $0.11 per share.

An analyst's less optimistic view of the stock's upside represents an additional catalyst for the stock's slide today. While JMP Securities analyst Trevor Walsh still sees room for the stock to run, his estimate of just how high is a little lower. Walsh reduced the price target on Planet Labs stock to $4 from $5.50. Based on the stock's closing price of $2.55 last Thursday, the $4 price target implies upside of 57%.

It's not a guarantee that a higher stock price is written in the stars

While Walsh believes Planet Labs stock will soar, it's important to remember that this is solely one opinion, and there are plenty of bears who are less optimistic about the stock's potential. For a growth stock such as Planet Labs, it seems growth isn't coming so easily, and potential investors may want to watch this story play out from the sidelines for now.

Should you invest $1,000 in Planet Labs Pbc right now?

Before you buy stock in Planet Labs Pbc, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Planet Labs Pbc wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of April 1, 2024

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.