Space stocks have been a hot topic, and Planet Labs (NYSE: PL) is one company in the industry that has surged 474% over the past year.
The stock reached $51 per share in late May but has since declined by 40%, including a 26% one-day drop the day after its June 4 earnings announcement
Here’s what has been driving Planet Labs’ stock lower and whether investors should buy the dip in the space stock. Planet Labs’ growing defense business Planet Labs operates a constellation of satellites that take images of planet Earth multiple times a day. It provides this imagery, along with spatial analytics and software, to government and enterprise customers daily, enabling them to monitor environmental changes, support defense operations, or optimize crop yields.
Over time, Planet Labs has evolved from an open-data start-up to a key contractor for defense and intelligence agencies, opening itself up to more lucrative government contracts. Its revenue has grown thanks to deals with government agencies such as the National Geospatial-Intelligence Agency, NASA, and NOAA. Earlier this year, the company was selected as a prime contractor under the $151 billion SHIELD IDIQ contract by the Missile Defense Agency.