What Happened?
Shares of earth imaging satellite company Planet Labs (NYSE: PL) jumped 12.1% in the afternoon session after the company announced a multi-year, low nine-figure agreement with the Swedish Armed Forces.
The deal involved providing a suite of satellites and space-based data to support Sweden's security operations. This marked Planet Labs' third major satellite services contract in the previous twelve months, following similar agreements with other countries including Japan and Germany. These three deals brought the total value from such contracts to over half a billion dollars, signaling strong demand for the company's offerings. Despite the significant new agreement, the company confirmed that its previously issued financial guidance for the quarter and fiscal year remained unchanged.
The shares closed the day at $25.44, up 12% from previous close.
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What Is The Market Telling Us
Planet Labs’s shares are extremely volatile and have had 58 moves greater than 5% over the last year. But moves this big are rare even for Planet Labs and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 17 days ago when the stock dropped 4.3% on the news that an analyst at Zacks Research downgraded the stock's rating from 'hold' to a 'strong sell'.
The downgrade was reportedly influenced by the company's recent earnings miss. Despite Planet Labs beating revenue expectations with a reported $81.25 million, it posted an earnings per share (EPS) of ($0.19). This figure was significantly below the consensus estimate of ($0.02), raising concerns for analysts and investors about the company's profitability and pressuring the stock.
Planet Labs is up 25.2% since the beginning of the year, and at $25.54 per share, has set a new 52-week high. Investors who bought $1,000 worth of Planet Labs’s shares at the IPO in April 2021 would now be looking at an investment worth $2,580.
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