PL

Planet Labs PBC

6.21
USD
-4.02%
6.21
USD
-4.02%
3.70 11.65
52 weeks
52 weeks

Mkt Cap 1.71B

Shares Out 275.80M

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Why Planet Labs Stock Plunged on Wednesday

What happened Shares of Planet Labs PBC (NYSE: PL) -- a space company you probably never heard of, and the owner of the world's largest constellation of Earth imaging satellites -- plunged 18.2% through 11:10 a.m. ET on Wednesday. The reason was earnings. Heading into Planet Labs' first-quarter 2023 earnings report last night, analysts were expecting a loss of $0.15 per share on sales of $39.5 million. As it turned out, Planet Labs missed the first target, losing $0.17 per share, even as it beat on revenue with sales of $40.1 million. So what Sales surged 26% in the first quarter, which, as management pointed out, was an acceleration from the 23% growth achieved in the fiscal fourth quarter of 2022 and the 16% rate for all of fiscal 2022. Management forecast even more growth, promising a leap to 38% year over year in the second quarter as the customer head count continues to increase. Planet says it now has more than 800 customers signed up, and 92% of its contracts are being renewed annually. Now what Revenue growth isn't really Planet's problem, however, as indicated by the earnings miss. The company noted that its gross profit margin improved by only about 1 percentage point to 41% in the first quarter, although management said its adjusted gross profit margin was 45%. The chances of profit margins improving in the second quarter, meanwhile, look iffy. Management gave only an adjusted-margin forecast: 44% to 46%, so roughly equal to the first quarter. On the other hand, for the full year, Planet is saying it will resume growing profit margins, to somewhere between 47% and 49% -- but again, on an adjusted (non-GAAP) basis. Unless investors shift their focus back to revenue growth, Planet's stock price recovering will probably depend on whether management can deliver on its promises of better profit margins later this year. 10 stocks we like better than Planet Labs PBC When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Planet Labs PBC wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of June 2, 2022 Rich Smith has positions in Planet Labs PBC. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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