Jim Cramer on Planet Labs: “It’s Not a Stock You Should Chase Blindly at These Levels”

Planet Labs PBC (NYSE:PL) was among Jim Cramer’s stock calls on Mad Money, as he highlighted worthy space players and reviewed several of this year’s IPOs. Cramer showed a pessimistic sentiment around the stock as he said:

Next up, Planet Labs. Okay, now, this one’s all about data from space. Planet Labs operates a fleet of Earth observation satellites and sells imagery, analytics, and intelligence to both governments and to commercial customers. These satellites can cover the entire world every 24 hours. Of course, if we’re using human labor, it’s very difficult to process all that data, but with the rise of AI, Planet Labs is suddenly a lot more valuable, which is why they keep launching new analytics tools.

Customers don’t just want pictures; they want answers, and they want them without having to look through millions of images every single day… It’s why the stock’s rallied more than 470% over the past 12 months. Planet’s latest results tell the story. Revenue was up 42% year over year. Defense and intelligence grew more than 65%. The remaining performance obligation was up 81%, and their backlog increased by 72%.

Those are big numbers, people, and they show that there’s real demand here, especially from government contractors. But Planet Labs is not cheap either, even after today’s beatdown. After its run this year, the stock trades at around 26 times sales. That’s not as expensive as Rocket Lab, but the growth isn’t as good either. It belongs in the conversation, but it’s not a stock you should chase blindly at these levels.

Planet Labs PBC (NYSE:PL) designs and operates satellite constellations that provide high-resolution geospatial data and daily Earth imaging through an online platform. In addition, the company provides custom satellite manufacturing, mission operations, and data analysis tools.

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.

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