Planet Labs Stock (PL) Soars Nearly 60% on News of Positive Free Cash Flow

The stock of Planet Labs (PL) is up 57% at noon hour on June 5 after the space company reported positive free cash flow for the very first time.

Planet Labs, which is an earth-imaging company, announced free cash flow of $8 million as part of its first-quarter financial results. It’s the first time that the company has generated positive quarterly free cash flow, sending the stock skyrocketing.

The free cash flow was reported alongside strong quarterly results. The San Francisco-based company announced breakeven first-quarter earnings and revenue of $66.3 million. Sales were up 10% from a year earlier. Wall Street had been looking for a loss per share of -$0.04 and revenue of $62.3 million.

Exceeding Expectations

In terms of guidance, Planet Labs said that it expects revenue of $65 million to $67 million for the current second quarter. Wall Street was forecasting Q2 sales of $65.4 million from the company. For all of this year, Planet Labs said it expects sales of $265 million to $280 million. Analysts had been anticipating full-year revenue of $270 million.

“We had an excellent first quarter, exceeding our expectations, demonstrating solid validation of our strategic direction and great execution,” said Planet Labs CEO Will Marshall in the company’s earnings release. Wedbush technology analyst Dan Ives called Planet Labs latest print “strong,” and raised his price target on PL stock to $7 a share from $5 previously while maintaining a Buy rating.

PL stock is now up 51% this year.

Is PL Stock a Buy?

The stock of Planet Labs has a consensus Strong Buy rating among nine Wall Street analysts. That rating is based on seven Buy and two Hold recommendations issued in the last three months. The average PL price target of $5.98 implies 1.56% downside risk from current levels.

Read more analyst ratings on PL stock