Planet Labs PBC (PL): A Bull Case Theory

We came across a bullish thesis on Planet Labs PBC (PL) on Substack by Unconventional Value. In this article, we will summarize the bulls’ thesis on PL. Planet Labs PBC (PL)’s share was trading at $3.28 as of April 15^th.

Planet’s early history and strategic decisions highlight its capital efficiency and focus on core competencies. A 2016 article by co-founder Mike Safyan reveals how the company evaluated entering the launch business and wisely chose not to, understanding that launch—despite its critical importance—is a capital-intensive, commoditized, and risky endeavor. Instead, Planet opted to mitigate its launch dependency through diversification across providers. While the plan was to spread risk—“many eggs in many baskets”—recent launches tell a different story: SpaceX has been the go-to for all six of Planet’s last missions. This shift reflects a changed landscape, not a strategic failure. SpaceX’s dominance and reliability now make it the logical choice, even at relatively higher launch costs. The tradeoff: reduced diversification in favor of near-guaranteed success.

Looking ahead, SpaceX’s Starship may unlock further capital efficiencies. If it succeeds in dramatically lowering cost to orbit, those savings could flow through to customers like Planet, either boosting capital efficiency or enabling constellation expansion. Since launch remains a major input cost, any meaningful price drop would have a significant impact on Planet’s business model.

Planet’s existing capital efficiency is already a strength. Despite the perception that satellite operations are capital intensive, Planet has demonstrated the opposite. Its Dove satellite constellation requires modest reinvestment—typically only 36 satellites per year to maintain operations. Historical capex during replenishment years (FY 2022 and 2023) was just $10M. This aligns with management commentary noting FY 2025’s elevated capex is due to the rare launch of two flocks instead of one. These figures confirm that PlanetScope can operate efficiently at scale with surprisingly low capital requirements, a trait that sets Planet apart in the satellite space and positions it to benefit meaningfully from future innovations in launch economics.

Planet Labs PBC (PL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held PL at the end of the fourth quarter which was 8 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 timeframe. If you are looking for an AI stock that is more promising than PL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.