Ouster Stock Moves Above 50-Day SMA: What Should Investors Know?

Shares of Ouster, Inc. OUST closed at $32.69, above its 50-day moving average of $28.93, indicating a bullish trend. Shares have gained 32.7% in the past three months, outperforming the industry’s increase of 22% and the sector’s rise of 15%. The Zacks S&P 500 composite has gained 9.2% in the said time frame. 

Ouster, a physical AI company, offers solutions powered by digital LiDAR combined with AI software. The company believes its digital lidar sensors are one of the highest-performing, lowest-cost solutions available today, positioning it at the center of a global revolution in autonomy. OUST targets a total addressable market that is projected to reach $19 billion by 2030.

OUST 50-Day Moving Average

OUST vs Industry, Sector, S&P

Shares of Aeva Technologies AEVA, operating in the same space, have lost 41.2% year in the past three months, while those of Luminar Technologies LAZR have lost 32.1%.

Aeva Technologies is broadening its reach beyond the automotive sector, advancing into industrial automation and intelligent transportation systems. Its noteworthy achievements include securing a speed enforcement contract in Australia and forming commercial partnerships with industry leaders such as SICK AG and Nikon. This strategic diversification enables AEVA to generate short-term revenues, balancing the typically lengthy cycle of automotive production contracts.

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 is Expensive

OUST is currently expensive. It is trading at a price-to-sales multiple of 9.78, higher than the industry average of 2.07. 

Shares of AEVA are trading at a premium to the industry, while those of LAZR are trading at a multiple lower than the industry.

The Case for OUST

Ouster is strategically positioned to benefit from the accelerating global adoption of LiDAR technology, which is becoming increasingly integral to the automotive, industrial, robotics, and smart infrastructure markets. Entering 2025, management has outlined a focused strategy centered on scaling its software-attached solutions, refreshing and upgrading its product lineup, and advancing toward profitability. For the third quarter, the company has guided revenues in the range of $35 million to $38 million, reflecting its confidence in sustaining growth momentum.

The merger with Velodyne in 2023 proved transformative, substantially enhancing Ouster’s digital LiDAR portfolio and broadening its customer reach. Importantly, the integration targeted more than $75 million in annual cost synergies, supporting both margin improvement and operating leverage. This strengthened position has enabled Ouster to deliver 10 consecutive quarters of revenue growth and maintain gross margins above 40%, underscoring its progress toward greater scale and efficiency.

Ouster is transitioning from a primarily hardware-driven business model to one centered on software-enabled solutions that generate recurring revenue streams. Its Gemini perception platform and BlueCity analytics suite exemplify this shift by extracting actionable intelligence from LiDAR data, thereby deepening customer engagement and expanding long-term value. With the global LiDAR market expected to approach $19 billion by 2030, the upcoming Chronos chip is designed to lower costs and enhance performance, paving the way for broader adoption across large-scale applications.

Management remains committed to achieving 30–50% annual revenue growth and sustaining gross margins in the 35–40% range. Recent wins, including multi-million-dollar contracts across all verticals, expanded collaboration with LASE PeCo, and the largest software-attached deal in Europe, highlight the company’s momentum.

Nonetheless, challenges persist. Ouster continues to operate at a loss and anticipates ongoing cash burn through at least 2026, thereby increasing its dependence on stronger sales or external financing. Additionally, concentrated manufacturing operations and new U.S. import tariffs present cost and supply chain risks. Its return on invested capital has also been in the red over time.

Yet, management is hopeful about the legislative changes that have unlocked billions in federal funding dedicated to accelerating the deployment of autonomous and intelligent systems across defense, transportation and industrial sectors. OUST believes it is well poised to capitalize on the given opportunity. The company also noted similar trends in Europe and Indo-Pacific with increased adoption of its technology for U.S.-allied defense and infrastructure applications.

Its balance sheet remains one of the strongest in the industry, with $229 million of cash and equivalents and no debt.

Optimistic Analyst Sentiment on OUST

The Zacks Consensus Estimate for 2025 and 2026 earnings has moved north in the past 60 days.

The Zacks Consensus Estimate for Ouster’s 2025 earnings per share indicates an increase of 24% on 29.8% higher revenues.  The consensus estimate for 2026 earnings per share indicates a 22.2% increase on 44.1.% higher revenues.  OUST has a Growth Score of B. 

Parting Thoughts on OUST Stock

With a broad product lineup, strengthening margins, increasing potential for recurring revenues and expanding use cases, the company is well-positioned to benefit 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.

Despite its premium valuation, this Zacks Rank #2 (Buy) stock is a strong contender for addition to one’s portfolio, given its growth prospects, price appreciation and optimistic analyst sentiment. 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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