Why Planet Labs Is Skyrocketing Today

Shares of Planet Labs (NYSE: PL) were flying higher on Thursday. The company's stock gained 5.9% as of 2 p.m. ET and was up as much as 12.6% earlier in the day. The leg up comes as the S&P 500 gained 0.4% and the Nasdaq composite was flat.

Yesterday, Planet Labs announced a key new deal with an as yet unnamed "Asia-Pacific commercial partner."

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A new deal

Planet Labs signed a $230 million deal to develop and manage a new fleet of its high-resolution Pelican satellites. The company will reserve a certain portion of the network's capacity for the partner but will have additional capacity to serve its other clients. So in addition to a $230 million payday, Planet Labs can leverage its expanded fleet for additional revenue.

The deal is the largest the company has entered to date. CEO Will Marshall called the deal "a significant milestone" and "a major step forward in what we see as a very large market opportunity for satellite services." He went on to detail the symbiotic nature of deals like this one, saying, "These types of partnerships are a win-win: our partners gain critical satellite capabilities and priority access to leading-edge technology, while they help Planet accelerate key space programs and create synergistic benefits for all our customers."

Riding the wave

The news comes just as the new administration makes space exploration a priority. President Donald Trump's inaugural address included his intention to put Americans on Mars. The comments gave space-related stocks a lift, Planet Labs included.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.