Planet Labs' share price experienced another surge on Thursday.
Following a 14% surge in alignment with an impressive earnings statement by Rocket Lab (RKLB losing 13.08% yesterdays), shares of fellow space-related stock Planet Labs (PL decreasing 7.86%) continued its climb in the early-Thursday market, increasing by 3.2% up until 11:35 a.m. ET.
It's quite unexpected, but if you're a Planet Labs shareholder, thank France for your good fortune.
Planet Labs' updated agreement with Abelio
This morning, Planet announced an increase in its collaboration with French "agricultural digital technology company" Abelio. According to Planet, it's been providing agricultural data and products to Abelio since 2018, but this revised agreement will increase the amount of Planet data accessible to its customer, covering "agricultural data across France."
Abelio uses data and images from Planet's satellite fleet as input for its AI models and algorithms, resulting in "time-sensitive insights for precision farming." (Yes, Planet Labs stock investors, you're now investing in an artificial intelligence company.)
Equipped with this data, Abelio can offer its clients more precise knowledge of which fields need additional nitrogen fertilizer, and the correct amount, reducing nitrogen use by around 5% to 10% on average – translating to savings for farmers. The expansion of available data should enable Abelio to generate similar insights in "irrigation management, crop monitoring, disease detection, and weed detection," while simultaneously boosting Planet Labs' earnings.
The Implications for Planet Labs
Planet Labs did not disclose the financial details of the contract extension, nor the amount it previously received from Abelio. Presumably, this means that the value of this single contract does not significantly affect the company as a whole.
With Planet Labs' annual revenue growth rate declining rapidly lately, decreasing from a 25% average over the past three years to barely half that over the past year, every little bit of additional growth is still welcome. Today's share price increase is possibly justifiable due to this factor alone. However, considering most analysts predict Planet Labs is still several years away from profitability, investors should continue to exercise caution when investing in this specific space stock.
This partnership with Abelio could potentially boost Planet Labs' earnings in the finance sector, as the company will receive increased revenue from providing agricultural data. Investors looking to diversify their investing portfolio might consider this space stock due to its promising potential for growth.
