I didn't see this one until I was in my 20s, but I still thought it was terrific! The Henson creatures alone are utterly fantastic, and then there's Bowie doing awesome songs! Yes, the plot is maybe not the greatest thing ever, but it's still a YES for me.
I actually like it a lot more than The Dark Crystal, which I saw around the same time and mostly failed to connect to. Technically, it's similarly impressive as Labyrinth, but the story feels like the most generic "chosen one" fantasy drivel, and the lack of facial expressions on the puppets made it hard for me to care about the characters.