Planet Labs (NYSE:PL) stock has been in a strong downtrend, extending the slide that began after its last earnings release. Shares have slumped 61% from their all-time high, and the options market is pricing in high volatility ahead of its earnings report on September 3.
Planet Labs Revenue Growth is Continuing
Planet Labs, a top company in the satellite imagery and earth data industry, has slumped in the past few months. This retreat has coincided with the sell-off in other space companies following the SpaceX (NASDAQ:SPCX) IPO.
The retreat happened even as its revenue growth gained steam. Its results showed that its revenue jumped by 42% in the first quarter to $94.2 million. This revenue growth happened as demand for its services continued rising.
For example, it received $21.9 million one-year contract extension from the National Geospatial-Intelligence Agency (NGA). Its revenue backlog jumped to over $900 million from $220 million in the same period last year.
According to Benzinga data, the upcoming report is expected to show revenue rising 42% to $104.2 million, within the company’s prior guidance range of $102 million to $107 million.
Planet Labs’ earnings per share is expected to come in at a loss of $0.02, narrowing from a loss of $0.03 in the previous year. Based on its recent history, chances are that its revenue will be higher than expected.
These earnings come two months after the company launched Pelican-11 satellite. This project is designed to validate new technologies and capabilities prior to their integration onboard the second-generation Pelicans. It will also help to scale its high-resolution, AI-powered monitoring capacity.
Top analysts maintain a bullish outlook on the stock. Goldman Sachs (NYSE:GS) raised its price target from $22 to $25, while Deutsche Bank lifted its target to $36. Craig Hallum also raised its target, from $36 to $49, while Northland Securities set its target at $50. The average analyst estimate stands at $35, up 76% from the current level.
Planet Labs Stock Technical Analysis
The daily chart shows that the PL stock has slumped from a high of $51.60 in May this year to a low of $19.12. It has moved below the 50-day and 100-day Exponential Moving Averages (EMA).
At the same time, the Relative Strength Index (RSI) has dropped from 74 in May to 32. These technicals suggest that the stock may continue falling, especially if its earnings come short of expectations.
On the positive side, it is slowly forming a double-bottom pattern at $19.12 and a neckline at $25.3. This pattern often leads to a bullish reversal. If this happens, the stock may rebound to $25 or $30 after earnings.
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