An Insider at Planet Labs PBC Just Bought $1 Million Worth of Stock

Research shows that following insider buying in small-cap firms tends to be a more profitable strategy than following insider buying in larger firms. Smaller companies are less researched than larger companies, meaning that they offer greater potential for ‘surprises’ that can lead to outperformance. 

In this report, we are going to highlight some interesting insider buying at a small US company, Planet Labs PBC (PL:US). Planet Labs is a provider of satellite imagery and geospatial solutions. At present, the company has 200+ satellites in orbit, collecting over 350 million sq km of imagery daily. It is listed on the New York Stock Exchange and currently has a market cap of around $1.07 billion.

Insider Buying at Planet Labs

2iQ data shows that on April 3, Kevin Weil, President, Product & Business, purchased 274,000 PL shares at a price of $3.64 per share. This trade cost the insider $997,113 and increased his holding to 439,580 shares.

High-conviction Purchase

This trade got our attention due to its size.

Not only is it large in nominal terms but it is also large in relative terms as it has increased the size of Mr. Weil’s holding by 165%.

The size of the trade suggests that Mr. Weil – who joined the company around two years ago – has a strong belief that the stock is set to move higher.

Our Insider Model sees the trading activity here as very bullish.

Strong Revenue Growth

Planet Labs is generating strong top-line growth at the moment.

For the fourth quarter of 2022, revenue came in at $53.0 million, up 43% year on year. This took full-year 2022 revenue to $191.3 million, up 46% year on year.

Encouragingly, profitability is improving at the same time. For 2022, gross margin came in at 49% versus 37% a year earlier.

Looking ahead, management is confident that the growth can continue.

For fiscal year 2024, it expects revenue to be in the range of $248 million to $268 million – representing growth of approximately 35% at the midpoint.

“We are maintaining our market leadership position, driving efficiency across our operations and are focused on our path to profitability. We ended the quarter with $408.8 million of cash, cash equivalents and short-term investments. Our strong finish to the year positions us for a solid Fiscal 2024 ahead,” said Ashley Johnson, Planet Labs’ Chief Financial and Operating Officer.

In light of the top-line growth here and the improving profitability, we see the insider buying as a bullish development.