Planet Labs is the better buy of the two space stocks at current prices though its $17.43 price is far above a $5.52 calculated fair value with margin of safety; it adds operating cash flow each quarter while Rocket Lab loses cash, and its R&D-to-revenue ratio should keep falling over the next three to ten years.

Meanwhile, Planet Labs' revenues also increased, but less noticeably. It generated $378 million in revenue over the past twelve months.

The company's business activity is expected to continue growing over the next three, five, and ten years, along with Rocket Labs as well.

For example, Planet Labs sold shares worth more than $100 million in the last quarter ended. They did so not because they desperately needed the money, but because there was a general frenzy surrounding space sector stocks, and their stock price had risen, so the management team took advantage of that opportunity, sold some shares, and raised some capital.

Planet Labs has already reached this milestone, achieving a remarkable positive cash flow of 31% over the past twelve months, and this has been the case for Planet Labs since approximately mid-2025 when it crossed the threshold of achieving positive cash flow.

Regarding the ratio of research and development to revenue, it is 39% for Rocket Lab and 34% for Planet Labs. But you can see that this percentage has decreased over the past several years .

However, this figure is still relatively large compared to most other companies.

But for Planet Labs and Rocket Labs, the figure is over 30%, and you can look at some quantum computing companies, where the figure sometimes exceeds 100% because they are still spending to develop technology that has not yet become commercially available on a large scale.

Therefore, it is good to see the trend line decreasing as revenues increase, and I expect this situation to continue. Again, the decline will not move linearly. There will be fluctuations and pauses at some points , but you can expect that in the long run, over the next three, five and ten years, the ratio of R&D to revenue will decrease, even if overall spending on R&D increases.

The balance sheet also becomes more important when looking at companies like Planet Labs and Rocket Labs, which are innovative companies that need to invest heavily to seize huge opportunities.

The balance sheet becomes important because, as an investor, you want to ensure that the company has enough time to develop its technology, and that it will not have to resort to the market out of desperation.

Again , in conjunction with the operating cash flow ratio, you want to know that the business is sustainable and does not need to resort to investors out of desperation . Certainly, both companies are in a good position in terms of their balance sheets .

Rocket Labs has more than $2.3 billion in cash and short-term investments, while Planet Labs has more than $867 million.

Before you jump to the conclusion that Rocket Lab is in a better position than Planet Labs, let me remind you that Rocket Lab has negative operating cash flow. This means that the company is losing money in its cash flows every quarter, while Planet Labs is adding money in its cash flows every quarter.

Therefore, I believe that Planet Labs is still in a better cash flow position compared to Rocket Lab, thanks to the operating cash flow it generates each quarter.

Based on the price-to-forward ratio, Rocket Lab is trading at nearly three times the valuation of Planet Labs, i.e., 31 to 11. As for Planet Labs, they calculated the fair value at $5.52.

The current market price is $17.43. Therefore, it appears to be valued much higher than its worth even after taking into account the margin of safety.

However, if I had to choose one of these two companies to buy today at current prices, I would choose Planet Labs as the better investment to buy. Its rating is more attractive.

The cash flow situation from operations is also positive and comfortable, and I am impressed with the long-term prospects of this company.