$PL - Earth Data to Become Increasingly Valuable Under Trump Administration

Alright, cat has gotten out of the bag while I have been writing this and Planet Labs is no longer a secret. This analysis is not written by ChatGPT, hopefully not nauseatingly sales-y, and has no regarded emojis or over the top use of “To the Moon”. No frills, just my take on where I think there is deep value.

**Overview:**
Earth observation data as a business has long struggled to be profitable. It requires significant CAPEX, is high risk (strapping a cam to a rocket essentially), and the R+D on a lot of the imaging can be pretty exorbitant. The main leader in the space, Planet Labs, went public in the SPAC boom. As a whole, they’ve underperformed the promises they presented in their first prospectus. Planet Labs sought to be a "One to Many" data provider, and their main selling point was that earth data could be widely commercialized. While this is still fundamentally true, in the time since going public they have essentially become a government contractor (75% revenue from some form of government with only a quarter from general business use) (source: Q2 Investor Presentation). Revenue being sourced primarily from the government is two sides of the same coin and the value lies in the eye of the beholder: it's bad because they are too reliant on too few customers, or that government revenue is extremely sticky and a major growth driver under the right administration. I am of the latter opinion.

I think we are at an inflection point that could cause Planet Labs to become far more profitable than they are currently, which will cause their valuation to adjust higher (far higher than even their recent run-up). While the use cases for the their data is very broad, it has become evident in the last few years that the most profitable one is government use.

**My thesis lies in the following:**

1. Donny and a Republican majority House/Senate will have a much larger Defense and Intelligence budget. They will be willing to pay a premium to obtain top tier defense and intelligence data from vendors like $PL.
2. NATO contract is highly promising (https://spacenews.com/planet-signs-deal-with-nato-to-supply-satellite-imagery/) and is a first of its kind deal. Follow-on mandates to come if $PL executes.
3. Launch of Tanager-1 (a first of its kind methane specific tracking satellite - highly valuable for int'l governments seeking to gather data on parties with the most harmful emissions) and subsequent release of data should bolster top-line (new sales team will hopefully execute).

Also before you ask, why can’t RKLB, SpaceX, etc. just strap cameras to their rockets? Or why can’t Starlink tack some cameras on their satellites? Boiled down most simply: they can’t do it efficiently or cost-effectively. They’d have to divert time and resources away from their primary businesses (which already have their own significant challenges) just to fight an uphill battle; this can be discussed more at length if clarity is needed but I just don’t see it as a likely scenario. Generally speaking this would more likely materialize as a continued symbiotic relationship (Planet Labs uses SpaceX rockets to launch their satellite constellations for example).

**Other thoughts:**
Larger market cap compared to closest peer, no debt, invests more heavily in development of new technologies (I view this as a plus long term - they understand that earth images can be commoditized and are spending heavily to develop a suite of analytics products which can materially enhance user experience - this will create competitive advantage long-term; and yes before you ask, their data is being used to train AI models - see Laconic deal today - perfect example of their R+D spend beginning to pay off), recently trimmed workforce (leaner operating structure), largest and highest-quality satellite fleet (and it's not even close - actually a staggering difference), multiple partnerships with Google (Google owns \~12%), rumors are circling that they will finally announce positive adj EBITDA either this quarter or next (management has been targeting Q4)

**Position and Price Target**:
I am planning to update this and positions continuously; I do believe in the growth of PL and will likely add on. May roll the 12/20’s, not decided yet.

Position:
12/20/2025 $5C 9x
4/17/2025 $5C 4x

Target: $PL 5/1/2025: $10/share

**TLDR:**
Earth data used for defense and intelligence will become significantly more valuable over the next year due to major administrative tailwinds. Donny's Department of Defense will award more government contracts at a higher value, which will finally let them scale in the way they were meant to (R+D, Capex, and cash burn from last few years will all be justified by a stronger top-line). The mature business model for $PL is essentially a software company with high gross margins. The margin expansion will finally be realized as more contracts are awarded and valuations will correct accordingly. Additionally, while they do seek to serve a wide array of industries (i.e. agriculture, natural resources, etc.) the biggest short term tailwinds (I think) will be defense and intelligence contracts.

Also - it is impossible to have covered all the bases in this, so shoot your questions below and let's discuss. Happy to try and answer/clarify any of the above points. Lastly, I am a complete regard lol I could be wrong; not financial advice.