Planet Labs Stock Rally Put To The Test As Earnings And SpaceX IPO Near

Planet Labs (NYSE:PL) stock remains in a strong bull run this year. It soared to a record high of $51.15, up by over 2,680% from its lowest point last year. This rally has accelerated this year as investors pile into space stocks ahead of the SpaceX IPO. This rally will be put to the test when it publishes its financial results.

Planet Labs to Publish Earnings as its Stock Surges

Top companies in the space industry have embarked on a strong rally this year as investors wait for the SpaceX IPO. This will be the biggest IPO ever, with the company expected to hit a $2 trillion valuation. 

Top space ETFs have soared to their record highs, with their inflows continuing to soar. The Procure Space ETF (NASDAQ:UFO) and Tema Space Innovators (NYSE:NASA) have accumulated over $1.3 billion and $2.6 billion in assets.

Planet Labs' rally wilk be put to the test when it publishes its financial results this week. The consensus estimate among analysts is that its revenue will be $90 million, up by 36% from the same period last year. The guidance for the upcoming quarter will be $100 million, while its annual revenue is expected to reach $427 million.

These results come at a time when its stock has become highly overvalued. Its $18 billion market capitalization means that it has a forward price-to-sales ratio of 42. This is a massive number considering that NVIDIA (NASDAQ:NVDA), a company valued at over $5.2 trillion trades at a forward multiple of 13. 

Planet Lab Stock Faces Major Risks Ahead

The ongoing PL stock surge faces some major risks ahead. The most notable one is that investors may sell it after the SpaceX IPO. This is a situation known as buying the rumor, and selling the news. It happens when investors buy an asset before a major event and then sell it when it happens.

The other risk is that it has become highly overbought, with the Relative Strength Index (RSI) soaring to 80. Also, it remains much higher than its historical averages. For example, its 50-day Exponential Moving Average is trading at $23, much lower than the current $51.

PL stock chart | Source: TradingView

Therefore, there is a risk that the Planet Labs stock will retreat either after its earnings or after the SpaceX IPO. This retreat will happen as investors book profits after the strong rally. 

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