Planet Labs' 2026 Outlook: Government Contracts Power Revenue Growth

Robert Izquierdo, The Motley Fool

Mon, September 14, 2026 at 2:35 AM GMT+3 7 min read

PL -1.44%

A soldier in a remote theater of operation pulls up a tablet to view a high-resolution, time-stamped map of a supply route. He isn't looking at a static archive. He is watching movement captured by Planet Labs (NYSE:PL) earlier that same morning.

The company operates the world's largest commercial fleet of Earth-observation satellites, effectively functioning as a real-time scanning utility for the planet. While the stock has seen a 75% gain over the last year, it remains a volatile asset, trading at $16.95 as of September 11, 2026, as the market weighs its high capital demands against its growing importance to national security agencies.

Our proprietary Hidden Gems scoring system assigns Planet Labs PBC an overall Superscore of 73 out of 100, placing it in the Above Average category. The Superscore is an AI-powered score that evaluates a company's overall strength by combining financial performance, product market position, technological capabilities, leadership quality, and relative valuation.

It represents the unification of all our scores into a single score for public companies, with five rating bands: Exceptional (90-100), Strong (75-89), Above Average (60-74), Average (40-59), and Cautious (0-39). This 73 Superscore places Planet Labs in the Top ~24% of all public companies we track, indicating a performance profile ahead of roughly 76 out of every 100 companies we score. This analysis serves as a research input to help you weigh the company's defensive moat against its operational risks before making your own determination.

IMAGE SOURCE: GETTY IMAGES.

Why PL Has a 73 Superscore

Revenue growth momentum: Planet Labs achieved 26% year-over-year revenue growth in fiscal 2026, demonstrating that its pivot toward high-value defense and intelligence contracts is successfully scaling.
Sovereign contract wins: The company secured a major 9-figure agreement with the Swedish Armed Forces, providing durable, multi-year revenue visibility that validates its shift into essential geospatial infrastructure.
Operational inflection: Achieving positive operating cash flow of $134 million in fiscal 2026 marks a structural shift for the company, proving it can fund its own growth after years of heavy cash burn.
AI data leadership: The company's massive, proprietary, and non-replicable historical archive of daily Earth imagery creates a formidable competitive barrier that software-only AI rivals cannot retroactively assemble.
Recurring revenue model: With 98% of its annual contract value being recurring as of Q2 fiscal 2027, which ended July 31, the business provides the stability required to withstand unpredictable shifts in government procurement cycles.

Why Is PL's Superscore Not Higher?

Persistent net losses: Despite achieving positive cash flow, the company reported a net loss of $247 million in fiscal 2026, highlighting the continued drag of heavy amortization and non-cash expenses on the bottom line.
High capital intensity: Maintaining a fleet of roughly 200 satellites requires constant replenishment, with capital expenditures frequently consuming significant portions of revenue and capping near-term margin expansion.
Stretched valuation multiples: Trading at a trailing price-to-sales ratio of 14.5x leaves little margin for error if guidance slips or if the pace of contract conversion to revenue slows in the coming quarters.
Concentration risks: Reliance on long-term government and defense contracts means the company remains exposed to shifts in national security budgets and the inherent delays in sovereign program procurement.

Planet Labs currently maintains a low return on net tangible assets, which ranks in the bottom half of the companies we score. This reflects the reality of its business model: it is a capital-intensive aerospace business that must build and deploy its own physical orbital infrastructure before it can generate the high-margin analytics revenue that will eventually justify its current market valuation.

Hidden Gems Database Scores for Planet Labs PBC (PL)

Is PL Right For Your Portfolio?

This stock warrants a closer look if...

You seek exposure to industrial stocks positioned at the intersection of satellite infrastructure and AI-driven defense analytics.
You are comfortable underwriting the execution risks of multi-year sovereign contracts and the capital-intensive nature of space-based data businesses.

You may want to keep researching before buying if...

You prefer companies that have demonstrated sustained net profitability rather than those relying on ongoing capital raises to fund fleet maintenance.
You are concerned by high revenue multiples that price in perfect execution across the company's complex pipeline of government programs.

The Superscore is one data-driven signal worth investigating, not a stand-alone buy recommendation. Always weigh this data against your own research, financial goals, and risk tolerance before acting.

My 5-year prediction for PL stock

Planet Labs is at a key inflection point in its business. It is ramping up customer adoption of its services, while trying to wrangle costs on its path to profitability. Investor excitement over space-based companies caused Planet Labs stock to soar to a 52-week high of $51.76 in May, but it has since fallen back to earth.

While its valuation currently remains high, several factors point to Planet Labs shares delivering a robust return over the next several years. Primary among them is that the company's data of the Earth supports a wide range of use cases, from government defense and intelligence objectives to agriculture and natural resource management.

For example, Planet Labs signed an agreement with Rwanda in August to deliver satellite data for the government to gain insights into agriculture and food security, urban planning, disaster response, and more. In September, it acquired a European defense and intelligence customer in a seven-figure deal.

The company's sales have grown annually over the past five years, from $131 million in its fiscal 2022 to $308 million in fiscal 2026, ended Jan. 31. Its poised to continue this trend, forecasting revenue between $430 million to $441 million in fiscal 2027. It also reported a customer backlog of about $815 million in its fiscal second quarter, ended July 31.

In fiscal 2026, Planet Labs turned a corner in its financial health. It recorded adjusted free cash flow (FCF) of $53 million compared to negative FCF of $64 million in the prior year. In fiscal Q2, it reported year-to-date FCF of $21.3 million. The company is well-positioned to capitalize on the growing demand for its unique satellite data, which is why I bought the stock.

The Hidden Gems Superscore reflects The Motley Fool's proprietary AI-driven evaluation of a company across product, financial, leadership, and valuation pillars as of the article date and may change over time. Performance figures are point-in-time. Past performance does not guarantee future results.

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Robert Izquierdo has positions in Planet Labs PBC. The Motley Fool has positions in and recommends Planet Labs PBC. The Motley Fool has a disclosure policy.

Planet Labs' 2026 Outlook: Government Contracts Power Revenue Growth was originally published by The Motley Fool