Planet Labs soaring on second-quarter revenue and EBITDA beat

Shares of mid-cap satellite-data provider Planet Labs have jumped more than 11% in premarket trading on Friday. On Thursday evening, the company reported quarterly revenue that substantially beat both its own guidance and the Wall Street consensus. Even the management's weak forecast for the current quarter failed to dampen investor sentiment.

Planet Labs shares are up more than 11% in Friday premarket trading to $20.40 apiece (as of 5:05 New York time and 14:05 Astana time). The company reported that second-quarter revenue surged 58% year over year to a record $116 million. That was 11% above the Wall Street consensus, according to data cited by Barron’s. The result also exceeded the management's guidance of $102-107 million.

The defense segment was the main driver: Planet Labs’ revenue from the business nearly doubled year over year to $81 million in the quarter, Barron’s writes. The conflicts in the Middle East and Ukraine have demonstrated the vital need for situational awareness, while a growing number of industries are recognizing the value of space-based data solutions, as the Motley Fool noted earlier in the year.

The strong top-line performance translated into significant operating leverage, helping adjusted EBITDA profit to rise almost 120% to $13.9 million, according to Planet Labs CFO Ashley Johnson, who was quoted in the press release. The figure beat Wall Street expectations by 504%, Barron’s notes.

“You cannot have a better earnings report than this one,” a user (AquaLung21) of Stocktwits, a social media platform for traders and investors, wrote, adding that “the ride is only beginning.” Another trader called the results “a clean beat.” Even weak third-quarter guidance failed to affect the sanguine mood. Planet Labs expects third-quarter revenue of $101-105 million and an adjusted EBITDA loss of $1-6 million.

Both figures are below the current Wall Street consensus, which is for a top line of $114 million and positive EBITDA of $2.5 million in the third quarter, Barron’s notes. Although the latest results look solid, the guidance could give investors pause, the article noted.

Barron’s also writes Planet Labs shares could be volatile throughout the day on Friday. The stock has moved an average of 34%, up or down, following the company’s last four quarterly reports.

Planet Labs shares are now off almost 7% year to date. Wall Street is upbeat on PL: it has seven “buy” calls versus three “hold” ratings. The average target price is $41.80 per share, implying almost 128% upside from the last close.