Is Planet Labs Building Revenue Stability Through Government Deals?

Planet Labs PL is a leading provider of Earth-imaging data and geospatial analytics, operating the largest fleet of Earth-observation satellites globally. The company primarily generates revenues through fixed-price subscriptions and usage-based contracts, delivering imagery and analytics through its cloud-based platform to government and large commercial customers. Ongoing revenue growth is being supported by the continued maturation of its subscription-based model, growing demand from government agencies, and a strategic shift toward higher-value satellite services and advanced analytics.

PL has increasingly prioritized securing large government and defense contracts, which provide long-term visibility and stability. At the same time, management views the commercial sector as a substantial growth opportunity as the company continues to enhance its product and solution offerings. The development of AI-enabled analytics for government customers is expected to drive broader adoption across commercial markets as well, enabling actionable insights for a wide range of use cases, including supply chain monitoring, security, operational optimization, insurance risk assessment, financial analysis, energy management and agricultural productivity.

A strong and growing backlog of $734.5 million at the end of the fiscal third-quarter 2026, representing a 216% year-over-year increase, provided solid revenue visibility. In addition, a high proportion of recurring revenues supports sustained top-line growth. For the fiscal fourth-quarter 2026, Planet Labs expects revenues in the range of $76 million to $80 million, implying approximately 27% year-over-year growth at the midpoint.

What About Its Peers?

Rocket Lab RKLB benefits from diversified government and commercial demand, giving the company resilient, multi-stream revenues. Rocket Lab continues to post strong revenue growth, reaching roughly $436 million in 2024, supported by frequent launches and a rapidly expanding space systems segment. It expects fourth-quarter 2025 revenues between $170 million and $180 million, implying double-digit sequential growth.

BlackSky Technology BKSY generated about $102 million in 2024 revenues, with imagery and analytics services comprising the majority of sales. It projects 2025 revenues in the $105-$130 million range as it expands its Gen-3 constellation. BlackSky’s growth is tied to commercial and defense imagery demand. In fact, Rocket Lab supports BlackSky’s deployments through launch services.

PL’s Price Performance

PL has gained 431.4% in a year, outperforming the industry.

PL’s Expensive Valuation

The stock is overvalued compared with its industry. It is currently trading at a forward 12 months price-to-sales multiple of 18.5, higher than the industry average of 2.26.  

Estimate Movement for PL

The Zacks Consensus Estimate for PL’s fiscal fourth-quarter 2026 and  fiscal first-quarter 2027 EPS witnessed southward movement in the last 30 days. The consensus estimate for fiscal 2026 earnings also witnessed southward movement in the last 30 days but the same for fiscal 2027 witnessed northward movement in the same time frame.
 

The consensus estimates for PL’s 2026 and 2027 revenues and EPS indicate year-over-year increases. 

PL stock currently carries a Zacks Rank #5 (Strong Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research