Planet Labs PBC (NYSE:PL) was given a qualified endorsement by Jim Cramer on Mad Money on October 6, in a segment devoted to what he called a stock that “has gotten killed.”
The shares traded at around $18 on October 6, 65.05% below their 52-week high of $51.76. “I put on a small position here,” Cramer said, while calling the company “a nice speculative pick” for investors in it “for the long haul and long haul only.”
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The Fall Had a Specific Cause:
Cramer traced the decline to one event rather than to sentiment. “Planet Labs plunged 26% on June 5th after launching a $1.5 billion stock sale program,” he said, describing it as about 10% of the company.
A company selling that much equity is telling the market it expects to need the money. The spending plan since then supports that reading. Cramer noted the company raised its annual capital expenditure forecast to between $100 million and $115 million, up from $80 million.
Against $865.42 million of cash and $498.62 million of debt, that rate of spending is affordable for several years. The business behind it is growing quickly. Revenue grew 58.10% in the most recent quarter to $378.28 million.
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The Loss Is Smaller Than the Headline Figure:
A net margin of negative 95.13% suggests a company losing almost a dollar for every dollar it sells. The operating margin is negative 12.00%. That difference is the most useful number in the accounts. Most of the reported loss is coming from below the operating line rather than from running the satellites.
On the operations themselves, gross margin is 55.49%, which is a software-like figure attached to hardware in orbit. So the question is not whether the imaging business can work. It is whether the gap between a 55.49% gross margin and a negative operating margin closes before the cash does. Cramer put the valuation at “14 times sales” and said it was “still not cheap.” At the current price, the multiple is 17.40 times.
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The Valuation Case:
Planet Labs traded at around $18 on October 6 and is worth $6.58 billion. Sustainability is the entire question, because there are no earnings to value and EBITDA is negative $48.40 million.
On price, the only workable measure is sales, and 17.40 times revenue is a growth multiple on a company that is not yet profitable. The balance sheet buys the time. A current ratio of 2.84 and more cash than debt means nothing is forced in the near term.
A beta of 2.17 means these shares move more than twice as hard as the index. Short interest of 9.68% is high for a company of this size.
Conclusion:
Cramer is calling this speculative and sizing it accordingly, which the figures support. Revenue grew 58.10% at a 55.49% gross margin, and the operating loss of 12.00% is far smaller than the 95.13% net figure suggests. However, the company raised capital spending to as much as $115 million while selling $1.5 billion of stock, and at 17.40 times sales the price already assumes the contracts keep arriving. The number to watch is operating margin, because it is the only line that shows whether the satellites pay for themselves.
Market Sentiment:
Planet Labs PBC was held by 53 hedge funds with a combined stake value of about $1.04 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 43 hedge fund holders with a cumulative investment value of around $0.90 billion in the previous quarter.
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This article is originally published at Insider Monkey.
