Planet Labs has fallen roughly 66% from its May peak. CNBC’s Jim Cramer said the lower valuation and improving business are enough to make him start buying.
CNBC’s Jim Cramer said Monday that Planet Labs has finally fallen far enough from its all-time highs to start buying . Shares of the satellite company are down roughly 66% from their May 28 peak of roughly $51. The sell off accelerated in June after Planet Labs authorized a $1.5 billion stock-sale program. Investors also bailed to shift money into SpaceX following its public debut. Planet Labs stock then suffered another prolonged slide — falling 14 of 15 trading days from late August into September. “The business is looking good at this point and I think believers will ultimately be rewarded,” the ” Mad Money ” host said. “If you like Planet Labs as much as I do, I’d put on a small position here and leave room to buy more if the stock keeps getting hammered.” What’s to like here? Planet Labs operates a fleet of satellites that photograph the Earth, providing governments and businesses with data to monitor everything from crops and natural disasters to military facilities. Cramer said AI could increase that information’s value by allowing customers to more easily analyze Planet Labs’ massive archive of imagery and build new applications on top of it. Planet Labs’ business is already gaining momentum. Fiscal second-quarter revenue jumped 58% to $116.1 million, while defense and intelligence revenue grew more than 90%. Management has also identified roughly $4 billion of satellite services opportunities, including about $1 billion it considers nearer term. Alphabet’s Google provided another catalyst. Last week, a Planet Labs prototype carrying four of Google’s custom AI chips reached orbit as part of Project Suncatcher, an experiment exploring whether AI computing infrastructure could eventually operate in space. The news helped send Planet Labs shares up 8% on Friday, offering a rare reprieve from their months-long slide. While saying that Google’s decision to work with Planet Labs validates its technology and could open up opportunities beyond satellite imagery, Cramer also noted some risks. Planet Labs is spending more to build and replace satellites, raising its annual capital expenditure forecast to $100 million to $115 million from $80 million to $95 million. The stock isn’t exactly cheap, either. Even after all that selling, Planet Labs trades at roughly 14 times 2027 fiscal year sales — sales, not earnings. That said, the valuation was much higher when shares peaked in May. “Remember, this was a penny stock not that long ago,” Cramer said. So, bottom line, he said that the lower multiple and improving business are enough for him to advise investors to start buying — cautiously. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
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