New York — As of 1:19 p.m. ET on Friday, December 26, 2025, Planet Labs PBC (NYSE: PL) shares were trading around $19.41, down about 4.5% on the day, after opening near $20.05 and ranging roughly between $19.22 and $20.09 in intraday trading.
The pullback is landing in a market that’s still in that post-holiday, year-end mode—lighter participation can exaggerate intraday moves, especially in higher-volatility names. [1]
Why Planet Labs stock is down today
A key catalyst circulating in market commentary: Zacks Research downgraded Planet Labs from “hold” to “strong sell.” [2]
The rationale highlighted by syndication partners centers on Planet’s earnings-per-share miss on a GAAP basis in its most recent quarter—despite strong top-line growth. Planet posted GAAP net loss per share of ($0.19), while some consensus estimates tracked elsewhere were closer to ($0.02). [3]
That’s the headline tension in PL right now: the company is scaling fast and improving cash generation, but profitability optics depend heavily on which “earnings” lens you’re using (GAAP vs. adjusted/non-GAAP).
The bull case investors have been pricing in: fast growth, better cash flow, and raised outlook
Planet’s latest reported quarter (fiscal Q3 2026, ended Oct. 31, 2025) delivered a cluster of numbers that growth investors tend to love:
- Record revenue (about $81M, up ~33% YoY) [4]
- Adjusted EBITDA profitability (about $5.6M profit for the quarter) [5]
- Positive free cash flow (about $0.9M for the quarter; $55.2M year-to-date) [6]
- A raised financial outlook: for fiscal Q4 2026 (ending Jan. 31, 2026), Planet guided revenue to roughly $76M–$80M; for full-year fiscal 2026, roughly $297M–$301M [7]
This is why you’ll see two very different narratives in the wild on the same day:
- “EPS miss and downgrade” (today’s tape) [8]
- “Revenue beat, strong outlook, improving cash flow” (the broader multi-quarter trend) [9]
Both can be true. Stocks are weird like that.
The backlog story: big contracted work in the pipeline
One of the most important “under-the-hood” signals from Planet’s Q3 update wasn’t just revenue—it was contracted future revenue.
Planet reported Remaining Performance Obligations (RPO) of about $672.47M as of Oct. 31, 2025, versus about $412.83M at Jan. 31, 2025. That’s the company’s contracted revenue not yet recognized (with specific accounting definitions). [10]
It also reported backlog of about $734.47M as of Oct. 31, 2025 (which includes RPO plus certain cancelable amounts, per the company’s definitions). [11]
This matters because PL’s investment case increasingly hinges on whether defense and government demand turns into durable, multi-year revenue streams rather than one-off spikes.
What’s driving demand: defense contracts, NATO, and “dedicated capacity” deals
Planet has been stacking defense and intelligence wins through 2025, many tied to its next-gen Pelican satellites and AI-enabled analytics:
- Germany (funded by the German government): a multi-year €240M agreement supporting European peace and security, including dedicated capacity and direct downlink services on Pelican satellites, plus access to PlanetScope/SkySat and AI-enabled solutions. [12]
- NATO: a new seven-figure contract for advanced daily monitoring and early warning capabilities leveraging PlanetScope Broad Area Monitoring plus AI/ML analytics. [13]
- U.S. Navy: a $7.5M contract renewal for vessel detection and monitoring across key Pacific areas of interest, integrating PlanetScope and SkySat data into the SeaVision platform and using partner analytics. [14]
- National Geospatial-Intelligence Agency (NGA): a $12.8M initial award under “Luno B” for AI-enabled maritime domain awareness solutions in the Asia-Pacific. [15]
- International defense & intelligence customer: an “8-figure” contract renewal for high-resolution imagery with access to Pelican and SkySat “assured tasking” capabilities. [16]
Add to that a Reuters-reported $230M deal (Planet’s largest at the time) to build high-resolution Pelican satellites for an Asia-Pacific customer, marking a strategic expansion beyond simply selling data from Planet-owned satellites. [17]
This is the strategic thread connecting many of the headlines: Planet is selling not just imagery—but responsiveness (tasking), dedicated capacity, and AI-enabled monitoring products.
Satellite catalysts: Pelican launches, “first light,” and on-orbit AI compute
Planet has also been feeding investors tangible execution milestones on the hardware side:
- The company announced the successful launch of Pelican-5 and Pelican-6 plus 36 SuperDoves on Nov. 28, 2025, and said it plans additional Pelican and SuperDove launches next year. [18]
- It released “first light” imagery from Pelican-6 (image taken Dec. 4, 2025) and emphasized that these Pelicans support Planet’s 50 cm products today, with a next generation targeting ~30 cm-class imagery—and that Pelicans include NVIDIA Jetson chips for on-orbit edge compute. [19]
CEO Will Marshall framed the pace bluntly: “We had first light the day after launch,” attributing it to Planet’s “agile aerospace approach.” [20]
The balance sheet (and the dilution debate): Planet’s $460M convertible notes
Another huge driver of PL’s 2025 rerating: Planet materially strengthened liquidity via convertible debt.
Planet closed an upsized offering of $460M of 0.50% Convertible Senior Notes due 2030. [21]
Key terms disclosed in filings/press materials include:
- 0.50% interest, paid semiannually [22]
- Maturity October 15, 2030 [23]
- Mentioned structure with an $18.04 effective conversion price per share (in connection with capped call transactions) [24]
Planet’s President and CFO Ashley Johnson said the financing was designed to strengthen the balance sheet “while minimizing dilution” and called strong demand “a clear vote of confidence.” [25]
The investor catch: convertibles can be a very shareholder-friendly way to raise capital—until the stock rips higher and the conversion math starts to matter. Today’s downgrade-driven selling is a reminder that the market keeps one eye on growth and one eye on share count.
Forecasts and analyst outlook: wide target range, rising expectations, and real skepticism
Analyst views on Planet Labs remain split—reflecting how unusual the setup is: a fast-growing space-data company with improving cash flow, heavy government exposure, and a stock that already had a monster run.
Some trackers show a wide price target range—for example, Zacks’ aggregated forecast range runs from roughly $12.30 to $22.00. [26]
Meanwhile, Planet’s volatility itself has become part of the story: after recent earnings, Barron’s noted big post-report moves and pointed to elevated short interest (around 13%) as one factor that can amplify price swings. [27]
What investors should watch into the next session (and why today’s drop might not be the whole story)
Because the U.S. market is open right now, this isn’t an “after-hours only” situation—price discovery is happening live.
Here are the practical, near-term things investors tend to track from here:
1) Does the downgrade narrative fade or stick?
If the selloff is mostly a reaction to the Zacks downgrade headline, it can cool off quickly—especially in holiday-thin trading. [28]
2) GAAP vs. non-GAAP framing (and what “profitability” means for PL)
Planet’s own outlook includes an expected adjusted EBITDA profit for the full fiscal year (roughly $6M–$8M) even while GAAP earnings can look messy due to accounting and growth investments. [29]
3) Contract momentum and backlog conversion
The real long-term question is whether those big defense and “dedicated capacity” wins reliably turn into revenue and renewals. The backlog/RPO ramp suggests momentum—but government contracting comes with cancellation clauses and timing complexity, which Planet itself flags in its definitions. [30]
4) Next key catalyst: Q4 / full-year fiscal 2026 results
Planet’s fiscal Q4 ends January 31, 2026, and that report is likely to be the next major “reset” moment for forecasts—especially around margin, free cash flow, and Pelican rollout progress. [31]
5) Satellite execution risk (the quiet boss battle)
Launches and “first light” are great; scaling a constellation and monetizing it at high gross margin is the grind. Planet is explicitly positioning Pelican plus on-orbit AI compute as a differentiator—investors will want to see that translate into product adoption and pricing power. [32]
Bottom line: Planet Labs stock is sliding today largely amid a downgrade cycle that spotlights GAAP EPS pressure, but the company’s 2025 news flow still points to accelerating revenue growth, rising contracted backlog, expanding defense demand, and a reinforced balance sheet via low-coupon convertibles. Whether today is a routine volatility event—or the start of a deeper repricing—will likely hinge on how Planet executes into its Q4 finish and how fast Pelican-driven contracts convert into durable cash flow. [33]
References
1. apnews.com, 2. www.barchart.com, 3. www.barchart.com, 4. www.businesswire.com, 5. www.businesswire.com, 6. www.businesswire.com, 7. www.businesswire.com, 8. www.barchart.com, 9. www.businesswire.com, 10. www.businesswire.com, 11. www.businesswire.com, 12. www.businesswire.com, 13. www.businesswire.com, 14. www.businesswire.com, 15. www.businesswire.com, 16. www.businesswire.com, 17. www.reuters.com, 18. www.businesswire.com, 19. www.businesswire.com, 20. www.businesswire.com, 21. www.businesswire.com, 22. www.sec.gov, 23. www.sec.gov, 24. www.businesswire.com, 25. www.businesswire.com, 26. www.zacks.com, 27. www.barrons.com, 28. www.barchart.com, 29. www.businesswire.com, 30. www.businesswire.com, 31. www.businesswire.com, 32. www.businesswire.com, 33. www.barchart.com
