Why Planet Labs Stock Fell This Week

• Planet Labs is simply a start-up moving connected outer imaging services from space.

• The company's backlog is increasing rapidly.

• Even aft this drawdown, the banal trades astatine a premium price.

• 10 stocks we similar amended than Planet Labs PBC ›

Shares of Planet Labs (NYSE: PL) fell astir 10% this week, according to information from S&P Global Market Intelligence. A abstraction system banal that operates a fleet of satellites for regular imaging services, the institution is making immense inroads with caller imaginable contracts for defense, civilian, and firm usage cases. The banal is up 487% successful the past 12 months aft reporting beardown net maturation and a caller concern with Alphabet for artificial quality (AI) information centers.

However, arsenic of 10:00 AM EST connected Friday, January 23rd, Planet Labs banal is down 10% this week. Here's why.

Last quarter's net for Planet Labs were fantastic. Revenue grew conscionable 33% year-over-year to $81 million, but its backlog was up a whopping 216% to $734 million. More and much customers -- some defence and firm -- are turning to Planet Labs for imaging services from space. It adjacent has a caller probe task with Alphabet to perchance physique information centers successful orbit.

So wherefore did the banal autumn this week? First, we saw momentum interruption crossed the committee for the marketplace successful wide implicit the flare-up astir Greenland-focused tariffs. Even though this contented seems to beryllium resolved (for now), galore speculative stocks, specified arsenic Planet Labs, person fallen from their highs. There was besides an insider merchantability from the CFO of Planet Labs. Ashley Johnson sold $4 cardinal worthy of stock, which tin beryllium a antagonistic awesome to investors aft a monolithic run-up successful the price.

Overall, Planet Labs investors are apt disquieted astir the stock's valuation today. It has a marketplace headdress of $8.33 cardinal compared to conscionable $81 cardinal successful quarterly revenue, and a price-to-sales ratio (P/S) of 28. This is going to induce volatility successful the stock terms going forward.

Even though the banal dipped this week, Planet Labs is up adjacent to 500% successful the past twelvemonth alone. It has a precocious P/S ratio and is not profitable. Yes, the institution is gaining a ton of caller contracts, but that does not mean you should bargain successful astatine immoderate price.

Despite the stock's flimsy diminution this week, Planet Labs banal is not a bargain astatine today's level.

Before you bargain banal successful Planet Labs PBC, see this:

The Motley Fool Stock Advisor expert squad conscionable identified what they judge are the 10 champion stocks for investors to bargain now… and Planet Labs PBC wasn’t 1 of them. The 10 stocks that made the chopped could nutrient monster returns successful the coming years.