Is PL a good stock to buy? We came across a bullish thesis on Planet Labs PBC on The Analyst’s Journal’s Substack by RA_Capital. In this article, we will summarize the bulls’ thesis on PL. Planet Labs PBC’s share was trading at $37.50 as of April 20th.
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Planet Labs PBC engages in the design, construction, and launch of constellations of satellites with the intent of providing high-cadence geospatial data delivered to customers through an online platform in the United States and internationally. Planet Labs PBC has delivered a transformative earnings report, validating its evolution from an unprofitable growth story to a cash-generative platform business.
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In FY2026, the company reported $307.7 million in revenue (+26% YoY), with Q4 accelerating 41% YoY. Adjusted EBITDA reached $15.5 million, and free cash flow hit $52.9 million, marking the first-ever annual profitability and cash generation. The backlog of $900.4 million (+79% YoY) provides exceptional visibility, while government and defense revenue grew 50%, confirming the company’s mission-critical positioning. Strong liquidity of $640 million eliminates financing concerns, enabling capital-light expansion, AI development through the NVIDIA partnership, and potential strategic acquisitions.
Despite the impressive fundamentals, Planet Labs’ stock surged 25.5% to an all-time high of $33.83, creating a valuation overshoot. FY2027 guidance of $415-440 million revenue implies continued growth but requires flawless execution. Even in optimistic scenarios with 40%+ sustained growth and 25%+ EBITDA margins, intrinsic value is estimated at $26-29 per share, suggesting 15-30% overvaluation versus the current price. Base-case DCF scenarios indicate $16-18 fair value, highlighting downside risk if any assumptions—growth, margins, or customer retention—are unmet.
Investment strategy recommends current shareholders trim 30-50% to lock gains, while prospective buyers should wait for a pullback to $27-30, where risk-reward becomes balanced. Planet Labs’ strengths include accelerating revenue, proven unit economics, and a durable government moat. However, near-term valuation and momentum risks, coupled with high volatility and execution dependence, warrant disciplined position sizing and timing. The company remains a long-term growth story, but patient entry points maximize upside potential while mitigating downside exposure.
Previously, we covered a bullish thesis on Planet Labs PBC (PL) by Unconventional Value in April 2025, which highlighted the company’s capital efficiency, disciplined avoidance of the launch business, and low-cost satellite replenishment strategy. PL’s stock price has appreciated by approximately 1043% since our coverage. RA_Capital shares a similar view but emphasizes on the company’s profitability inflection and strong earnings-driven transformation.
Planet Labs PBC is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held PL at the end of the fourth quarter which was 40 in the previous quarter. While we acknowledge the risk and potential of PL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
