Ouster vs. Luminar: Which LiDAR Powerhouse is a Safer Long-Term Play?

LiDAR technology holds strong long-term potential in the automotive sector, with initial adoption focused on premium vehicles and robotaxis. Its rising popularity is driven by its ability to provide accurate 3D mapping and object detection, complementing cameras and radar in advanced driver-assistance systems (ADAS) and autonomous driving applications. Within this landscape, both Ouster, Inc. OUST and Luminar Technologies LAZR are developing cutting-edge sensing solutions to position themselves as key industry players.

Ouster highlights its digital LiDAR sensors as among the highest-performing and most cost-effective in the market, targeting a pivotal role in the global shift toward autonomy. Meanwhile, Luminar differentiates itself with a proprietary, vertically integrated hardware and software suite—including its Iris, Sentinel, and Halo platforms—offering a unique value proposition compared to competitors.

Yet, as an investment option, which stock is more attractive? Let’s closely look at the fundamentals of these stocks.

The Case for OUST

Ouster is well-positioned to benefit from rising LiDAR adoption across automotive, industrial, robotics, and smart infrastructure markets. Its 2023 merger with Velodyne expanded its digital LiDAR product lineup, broadened its customer base, and set a goal of more than $75 million in annual cost synergies. For 2025, management projects second-quarter revenues between $32 million and $35 million, emphasizing software-attached solutions, product upgrades and a push toward profitability.

The company is shifting from hardware-focused sales to software-driven offerings like its Gemini perception platform and BlueCity analytics suite, aiming to build recurring revenue streams. Its upcoming Chronos chip is designed to lower costs and improve performance, supporting adoption across a $19 billion addressable market by 2030. Ouster targets 30-50% annual revenue growth and gross margins of 35-40%, supported by major deals across all verticals, including its largest software-attached contract in Europe and expanding partnerships such as with LASE PeCo.

Despite steady revenue growth and gross margin gains, Ouster remains unprofitable and expects continued cash burn through at least 2026, depending on improved sales or external funding. Manufacturing concentration and U.S. tariffs add risk, but with $171 million in cash and no debt, its balance sheet remains solid.

The Case for LAZR

Luminar has emerged as a key player in automotive and industrial LiDAR, underpinned by partnerships with major OEMs like Volvo and Caterpillar. These alliances reflect growing adoption in both autonomous vehicles and industrial automation. As LiDAR technology becomes standard in more vehicle models and autonomous systems advance, Luminar is well-positioned to capitalize on expanding opportunities.

To streamline operations and reduce expenses, Luminar is focusing its efforts on core technologies. Its industrialization partnership with TPK/LTEC has already yielded $80 million in cost savings. The company is scaling sensor shipments while maintaining steady revenue growth. With the launch of its Halo platform and a transition to unified sensor architecture, Luminar expects over $100 million in annualized cost savings, aiming to triple production volume to achieve greater economies of scale.

On the financial front, Luminar is taking a disciplined approach. Its free cash flow burn is narrowing, while debt has been significantly reduced, from $625 million to $185 million as of May 2025. These strategic moves indicate a clearer path toward sustainable operations and long-term profitability. As LiDAR adoption accelerates across both automotive and industrial sectors, Luminar stands ready to scale and strengthen its leadership position in the market.

Estimates for OUST and LAZR

The Zacks Consensus Estimate for OUST’s 2025 revenues and EPS implies a year-over-year increase of 29.1% and 16.4%, respectively. There has been no change in estimates in the past 60 days. OUST has a Growth Score of A.

On the other hand, the Zacks Consensus Estimate for LAZR’s 2025 revenues and EPS implies a year-over-year increase of 14.9% and 53.4%, respectively. EPS estimates have moved 12.1% northward over the past 60 days. LAZR has a Growth Score of F.

Are OUST and LAZR Shares Expensive?

Ouster is trading at a forward 12-month price-to-sales multiple of 8.45, above its median of 2.75 over the last three years. Luminar is trading at a forward 12-month price-to-sales multiple of 1.34, lower than its median of 5.58 over the last three years.

Conclusion

With a broad product lineup, Ouster is well-positioned to strengthen margins and increase its potential for recurring revenues, benefiting from the long-term growth of LiDAR adoption. If it can sustain its growth trajectory, manage costs effectively and execute its transition to software-led solutions, Ouster could emerge as a key enabler in the evolution of automation and intelligent technologies.

Luminar Technologies specializes in cutting-edge LiDAR sensors and software designed to enable safe and scalable autonomous driving. Its long-range, high-resolution systems are built for seamless integration into passenger and commercial vehicles, supporting leading automotive OEMs. The company is also expanding into full-stack autonomy and software solutions to accelerate adoption across the industry.

OUST shares have gained 131.6% year to date, while those of LAZR have lost 47% in the same time frame. Though OUST and LAZR carry a Zacks Rank #3 (Hold) each, OUST’s huge price appreciation makes it appear as a safer bet.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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