Planet Labs (NYSE:PL) was started at Hold by Morgan Stanley on Monday. However, equity analyst Matthew Sharpe still sees substantial upside for the stock even while withholding a bullish rating.

“Many sub-segments of Planet’s addressable market are experiencing secular tailwinds. The most notable tailwinds are tied to environmental, defense and intelligence, and digital transformation spending,” he explained. “We believe the addressable market will grow at a high single-digit CAGR through early next decade with a profile that’s front-end loaded. The company’s first mover advantage and pipeline of new products and technology should allow it to outgrow the market substantially.”

Sharpe forecasts 20-25% annual growth in the next half-decade. Additionally, the company’s liquidity is expected to sustain the company through that period with minimal risk of dilution.

Sharpe assigned a $6 price target to the stock, implying about 20% upside from Monday’s open. That said, he indicated that estimates remain elevated for the post-SPAC name, which could prompt a choppy trajectory in 2023 and makes a Hold-equivalent rating appropriate.

Shares of the California-based satellite company fell 2.03% shortly after Monday’s market open.

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