Shares of Planet Labs (PL) slid 6.2% to $30.70 on June 9, extending a brutal selloff that has wiped out roughly 36% from the stock's pre-earnings peak near $48 in just one week. The irony: the satellite-imagery company just posted what its CEO called the best quarter in its history. For shareholders, the tension between blowout results and violent profit-taking defines the stock's next chapter.
Record Revenue Wasn't Enough to Hold the Rally
Planet Labs reported record Q1 fiscal 2027 revenue of $94.2 million, up 42% year-over-year.
Remaining performance obligations — essentially contracted future revenue — jumped 81% to $816 million, while total backlog surged 72% to over $906 million. Yet the stock peaked at $48 on June 2 and has been in freefall since, suggesting the market had already priced in a strong print and is now demanding proof that the backlog converts to sustained profits.
Margins Are Going Backward Before They Go Forward
Management guided for a near-term adjusted EBITDA loss of negative $6 million to negative $3 million and lower gross margins, citing necessary investments to capture demand.
Non-GAAP gross margin is expected to fall to 50–52%, down from 59% in fiscal 2026, while commercial-sector revenue was "down year on year" and civil government revenue was flat. In plain terms, Planet is spending more to build satellites and serve big defense contracts before those deals throw off cash — a bet that pays off only if execution is flawless.
A $1.5 Billion Stock Sale Adds Dilution Risk
Planet Labs launched a $1.5 billion at-the-market stock offering program on June 5, partnering with major banks to sell shares over time.
The company also set up hedging structures that could influence shareholder dilution and trading dynamics. For existing investors, this means the company may steadily sell new shares into the open market, effectively shrinking each current shareholder's slice of the pie unless revenue growth outpaces the issuance.
Analysts Are Bullish, but the Stock Must Prove It
Craig-Hallum raised its price target to $49 and Northland to $50 , while the consensus target jumped from $24.71 to $34.44.
Roughly 82% of revenue comes from government contracts — steady but vulnerable to budget shifts. At $30.70, PL trades below the consensus target, but investors now face a company simultaneously promising aggressive growth, accepting thinner margins, and selling new stock. The backlog is enormous; the question is whether the bridge to profitability holds.