Satellite imagery specialist Planet Labs (PL) reported its third-quarter earnings last night, which has the stock on pace to open 11% lower this morning as investors react to the news. The company reported a Q3 adjusted loss per share of $0.02, which beat expectations, while revenue increased 10.7% from the previous year to $61.3 million.
Planet Labs ended Q3 with cash, cash equivalents, and short-term investments totaling $242 million, and management anticipates capex in the range of $8 million to $11 million for the current quarter.
Despite achieving a record non-GAAP gross margin, the market has reacted negatively, as Q3 revenue growth fell short of analysts’ expectations. Additionally, Q4 revenue guidance of $61 million to $63 million came up short against the $66.1 million consensus.
Heading into today’s session, PL is up 42% on a year-to-date basis, and the penny stock was likely overdue to correct its ongoing overbought status, based on its 14-day Relative Strength Index (RSI) - which has been stuck above 70 for nearly a month now. Today’s pullback has PL on pace to test support at its 20-day moving average for the first time since early December.
Analysts remain bullish, with a consensus “Strong Buy” rating from the 10 in coverage. However, the shares settled yesterday above their average 12-month price target of $4.00, again suggesting that the stock’s recent rally had become a little overheated.
For investors considering today’s pullback in PL stock as a potential entry point, it’s worth considering your risk tolerance and time horizon for investing. Planet Labs faces challenges with profitability, as indicated by its below-average net margin and return on equity.
The company is actively pursuing strategic initiatives, such as securing large government contracts and enhancing its data products with artificial intelligence (AI) solutions. Looking forward, Planet Labs aims to achieve adjusted EBITDA profitability and maintain a strong balance sheet. However, it must navigate operational and market risks to realize these goals, which means the penny stock is best-suited for investors who can tolerate heightened volatility in the meantime.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/A%20concept%20image%20of%20a%20flying%20car_%20Image%20by%20Phonlamai%20Photo%20via%20Shutterstock_.jpg)
/A%20concept%20image%20of%20space_%20Image%20by%20Canities%20via%20Shutterstock_.jpg)
/Oracle%20Corp_%20office%20logo-by%20Mesut%20Dogan%20via%20iStock.jpg)