Why Planet Labs Stock Powered Nearly 66% Higher Last Month

Coming just after Planet Labs' (NYSE: PL) latest satellite launch, December was a good month for the space company's stock. Its price rose by almost 66% across that stretch of time, on news of that launch, in addition to encouraging quarterly results, and positive analyst notes after those figures were published.

Twin satellite launch

Planet Labs barreled into December on a high note -- almost literally. On the last business day of the previous month, Planet Labs announced the successful launch of a pair of artificial intelligence (AI)-enabled, high-resolution imagery satellites, Pelican-5 and Pelican-6. Less than two weeks later, the company released an impressive set of light images from Pelican-6 of an airport in Tibet.

Image source: Getty Images.

Buoyed by the positive momentum from these developments, the company unveiled those financial results. For its third quarter it posted record revenue of $81 million, which was a sturdy 33% higher year-over-year, plus it crushed the average analyst estimate of $72 million.

Planet Labs also managed to considerably reduce its net loss not according to generally accepted accounting principles (GAAP). This withered to less than $1 million ($0.00 per share) from the over $8 million deficit of the year-ago period. Again, this was well better than the pundit consensus; those folks were collectively modeling a $0.04 per share net loss.

Management has been doing a good job pivoting the company into business with defense sector clients, who can reap significant benefits from the company's high-resolution satellite imaging services. That steep revenue increase shows that there's demand for such offerings, and Planet Labs is demonstrating it can be a go-to provider in this very specialized niche.

Bulls on the run

Such performance rarely goes unnoticed by both investors and analysts and, sure enough, several of the latter came out with new, bullish takes on Planet Labs.

Notable among these was ever-influential bank Citigroup, whose prognosticator John Godyn iniated coverage of the company's stock one day after those quarterly figures were published. Godyn flagged the shares as a buy, at a price target of $19 apiece.

Other researchers raised their price targets on Planet Labs post-earnings, in some instances quite dramatically. Among these analysts was Kristine Liwag of Morgan Stanley. She more than quadrupled her fair value assessment, from $4.50 per share to $20.

Although she kept her equalweight (i.e., hold) recommendation on the stock, Liwag's latest Planet Labs note felt rather bullish. According to reports, she wrote in the note that the third-quarter numbers were an indication that the company's strategic shift was working, while new multi-year contracts with clients show that its AI-enhanced satellite services are resonating with the market.

While all this is impressive, personally, I'd like to see Planet Labs rise into consistently positive bottom-line territory. As it is, I'm not yet fully convinced the company can turn its currently energetic momentum into lasting success.

Citigroup is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.