LiDAR's Future: AEVA or OUST - Which Stock Shines Brighter?

The world of LiDAR sensors is buzzing, and two major players, Aeva Technologies AEVA and Ouster Inc. OUST, are at the forefront. Both companies are busy crafting advanced sensing solutions that power everything from self-driving cars and robots to smart cities and factory automation. LiDAR is set to transform the future of mobility and automation, making these two stocks natural rivals in a high-stakes, high-growth arena.

While AEVA is turning heads with its groundbreaking Frequency Modulated Continuous Wave (FMCW) technology and bold ventures into industrial markets, Ouster is earning praise for its solid financial management, diverse client base, and rapidly increasing revenues. As investors grow more interested in hardware powered by artificial intelligence, both AEVA and OUST find themselves at crucial points in their growth journeys. So, which one offers a better investment opportunity right now? Let's take a closer look at their core strengths.

The Case for AEVA Stock

Aeva Technologies has successfully shifted its focus beyond just the automotive sector, now making strides in industrial automation and intelligent transportation systems. The company has landed significant deals, including a speed enforcement contract in Australia and commercial agreements with leading manufacturing SICK AG and Nikon. This diversification offers AEVA immediate revenue streams, which is vital given the typically slow pace of automotive production deals.

Big names like Sylebra Capital are backing AEVA, and there is a $125 million financing facility in place. Plus, a Fortune 500 tech partner has invested $32.5 million in equity and pledged another $17.5 million for product development. These financial injections mean Aeva Technologies has enough cash to operate comfortably at the moment, giving them time for research, development, and scaling up production.

AEVA’s most exciting wins, its Daimler Truck deal and a contract with a top-10 global passenger OEM, have multi-billion-dollar potential. The company is already shipping development units and meeting integration milestones. If successful, these deals could make AEVA the standard LiDAR supplier on multiple vehicle models by 2027, potentially generating hundreds of millions in annual revenues.

However, AEVA faces challenges. These deals won’t bring in big money right away. Aeva Technologies still has much to do, including product development, working closely with customers, and managing its finances, all while generating only limited revenues in the near term.

The Case for OUST Stock

Ouster stands out for its smart financial management. In the first quarter of 2025, the company reported $32.6 million in revenues, almost 10 times more than AEVA, while maintaining a healthy 41% gross margin. OUST’s annual revenues are expected to grow around 30% this year and the company is likely to break even much quicker than AEVA. With a low operating cash burn of less than $5 million in Q1 and robust cash reserves of around $170 million, Ouster appears to be on a more sustainable growth path.

Ouster's customer base is broad, extending beyond just cars to robotics, industrial automation, smart infrastructure, and defense, serving over 1,000 clients. Key contracts include multi-million dollar deals with Komatsu, Utah’s Department of Transportation, and leading robotics companies. This diverse portfolio reduces their dependence on lengthy automotive agreements, providing steady, immediate revenues.

A significant boost for Ouster comes from its inclusion in the U.S. Department of Defense’s Blue UAS list. This allows their LiDAR products to be sold to federal agencies without complex hurdles. Defense contracts are typically high-margin and long-lasting, offering a rare stability in the LiDAR sector. This achievement not only builds Ouster's reputation but also opens doors to substantial future growth.

With no long-term debt and robust margins, Ouster seems better positioned for near-term profitability. This financial health allows it to pursue growth opportunities without diluting shareholders or relying on external funding, which can be particularly compelling in a capital-intensive sector like LiDAR.

Price Performance

Both stocks have seen impressive gains. AEVA is up over 500% year to date, largely fueled by excitement around its industrial successes and future auto deals. OUST, meanwhile, has climbed nearly 100% over the same period, a reflection of its steady operational performance and growing investor confidence in its journey towards profitability.

Valuation Comparison

The valuation difference is striking. AEVA's forward price-to-sales (P/S) ratio over 50 suggests aggressive expectations for future potential. Ouster, on the other hand, trades at just over 7X forward sales, a more grounded multiple supported by actual revenues and near-term profitability goals.

Revenue Estimates

AEVA's revenues are projected to jump 90% in 2025 and 156% in 2026, though from a smaller starting point, reaching $17.2 million in 2025.

OUST is expected to see revenue growth of 29% in 2025 and 47% in 2026, hitting $143.4 million in 2025 — over eight times AEVA’s projected revenue.

Conclusion

Both AEVA and OUST are pivotal in shaping the future of LiDAR technology, but they have distinct strategies. AEVA's innovative FMCW tech and ambitious pipeline offer huge long-term potential, but this comes with high valuation risks, substantial cash burn, and a longer wait for significant revenues.

Conversely, Ouster — rated as a Zacks Rank #2 (Buy) — clearly has an edge over AEVA, which currently carries a Zacks Rank #3 (Hold). OUST's diverse revenue streams, strong financial health, improving profit margins, and realistic path to profitability make it more compelling. While AEVA could deliver exceptional returns if everything aligns perfectly, OUST offers a more balanced blend of growth, stability and immediate operational strength, making it the more attractive investment right now.

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

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