What happened Planet Labs (NYSE: PL) stock, the recent space special purpose acquisition company (SPAC) IPO that operates a constellation of 200 Earth-imaging satellites in orbit...kind of went into orbit itself today. As of 12:30 p.m. ET, Planet Labs shares are up a solid 20%. And you can thank Goldman Sachs for that. Image source: Getty Images. So what Investment banker Goldman Sachs initiated coverage of Planet Labs with a buy rating and an $11 price target this morning, reports StreetInsider.com. If the analyst is right about that, then Planet Labs stock that is up 20% already today could have another 60%-plus run ahead of it this year. Why does Goldman Sachs think that? "Planet is the market leader in commercial earth observation, where the opportunity to sell data analytics into many industries is massive" and "profit margins can be high" says the banker. Now what How high, you ask? Well, in discussing its business plan prior to its IPO, Planet Labs estimated that by 2026, it should be raking in gross profit margins on the order of 74% -- and free cash flow (FCF) profit margins of as much as 35%. Applied to estimated 2026 revenues of $693 million, that implies that Planet could be generating positive FCF of as much as $240 million annually a few years from now -- not bad for a stock that costs only $1.8 billion in market cap currently. Granted, Planet Labs' predictions remain to be proven. Last I checked, Planet Labs was growing revenues according to schedule, but its profit margins looked a bit iffy relative to projections. In its note, Goldman cautions that it will "take time" for Planet to grow into its full potential, however, and that over time, the company's "scalable [business] model" will prove profitable. Fingers crossed. 10 stocks we like better than Planet Labs PBCWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Planet Labs PBC wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of January 10, 2022 Rich Smith owns Planet Labs PBC. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source