The Earth Observation (EO) space is transitioning from a satellite imagery business to a geospatial intelligence market, fueled by advances in artificial intelligence, growing defense investments and increasing demand for climate monitoring. Governments are expanding their use of commercial EO data to support national security and strategic decision-making, while enterprises are leveraging satellite-based analytics across agriculture, infrastructure, energy, and environmental management. At the same time, the industry is shifting toward subscription-based data and analytics platforms, enabling providers to generate more predictable, recurring revenue streams while delivering higher-value insights to customers.
In this context, Planet Labs PL and Satellogic Inc. SATL are worth mentioning. Planet Labs is a leading provider of Earth-imaging data and geospatial analytics, operating the largest fleet of Earth-observation satellites globally. Satellogic is a vertically integrated Earth observation company that designs, manufactures, and operates satellite systems, delivering decision-grade insights at scale to government and commercial customers. Let's discuss in detail.
The Case for Planet Labs
Planet Labs generates most of its revenues from fixed-price subscription agreements and usage-based contracts, providing satellite imagery and geospatial analytics to governments and large enterprises through its cloud-based platform. Its growth has been supported by an expanding subscription base, stronger government demand and a strategic shift toward higher-value satellite services and advanced analytics.
The company exited the first quarter of fiscal 2027 with backlog surging 72% year over year to more than $906 million, strengthening revenue visibility and supporting expectations for accelerating growth. Management forecasts fiscal 2027 revenues of $425-$441 million.
Planet Labs is increasingly targeting large government and defense contracts, which provide greater revenue stability and longer-term visibility. While this segment remains the primary growth engine, management also sees considerable long-term potential in the commercial market. Continued platform enhancements should support wider adoption, while AI-powered analytics, originally developed for government customers, are opening opportunities across supply-chain monitoring, surveillance, operational optimization, insurance, financial analysis, energy and agriculture.
However, Planet Labs remains unprofitable. Investments in satellite infrastructure, heavy research and development spending and elevated operating costs continue to constrain margins. Following five consecutive years of losses, the company is expected to remain in the red through fiscal 2027, while returns on equity and invested capital trail industry levels. Management expects fiscal 2027 non-GAAP gross margin of 52-54% and adjusted EBITDA between breakeven and $10 million, suggesting that consistent profitability remains some distance away.
PL shares have gained 12% year to date.
The Case for Satellogic
Satellogic provides affordable, scalable satellite imagery that addresses rising demand across government, defense, agriculture, energy, insurance and infrastructure markets. As governments and enterprises increasingly rely on timely Earth intelligence for decision-making, the company appears well-positioned to capitalize on multiple long-term growth opportunities.
Its proprietary manufacturing capabilities, vertically integrated operating model and low-cost satellite architecture distinguish Satellogic from traditional providers. By designing, manufacturing and operating its own satellites, the company can reduce production and operating costs, accelerate deployment and upgrade its constellation more frequently. As the network expands, improved revisit rates, image quality and global coverage should enhance the value of its data offerings and support commercial adoption.
The next-generation Merlin constellation should further strengthen Satellogic’s position across government and commercial geospatial intelligence markets. Importantly, Merlin is fully funded, with its development anchored by a $30 million contract from a strategic defense and intelligence customer. The agreement demonstrates confidence in the company’s technology while improving revenue visibility.
Strategic partnerships and expanded analytics capabilities could also broaden Satellogic’s addressable market beyond raw imagery into higher-margin geospatial intelligence solutions. The company expects to progress toward sustained profitability this year, supported by a solid backlog, increasing recurring revenues from Aleph Observer and a strengthening pipeline of multimillion-dollar opportunities across defense, sovereign and commercial customers.
SATL shares have rallied 90.9% year to date.
Estimates for PL and SATL
The Zacks Consensus Estimate for PL’s fiscal 2027 revenues implies a year-over-year increase of 41.9%, while the same for earnings per share (EPS) suggests a 75% year-over-year decrease. EPS estimates have witnessed no movement in the past 30 days.
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The Zacks Consensus Estimate for SATL’s 2026 revenues implies a year-over-year rise of 122.3%, and the same for EPS implies no year-over-year change. EPS estimates have witnessed no movement in the past 30 days.
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Are PL and SATL Shares Expensive?
PL is trading at a forward sales multiple of 15.72, above its median of 4.97 over the last five years. SATL’s forward sales multiple sits at 10.49, lower than its median of 12.71 over the last five years.
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Conclusion
Planet Labs, a data-driven company focused on Earth-observation imagery and analytics, is poised to grow, given the rising global demand for commercial satellites.
Satellogic is well-positioned to benefit from rising defense spending, growing demand for geospatial intelligence and increasing adoption of AI-driven analytics.
Given SATL’s less expensive valuation, price appreciation and growth projections, it has an edge over PL. SATL carries a Zacks Rank #3 (Hold), while PL carries a Zacks Rank #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).