Can Ouster's R&D Spend Lead Lidar Shift, Grow Market Presence?

Ouster Inc. OUST places strong emphasis on research and development (R&D) as a fundamental pillar of its long-term growth and leadership in the lidar industry. As a pioneer in 3D sensing solutions for autonomous vehicles, smart infrastructure, robotics and industrial automation, Ouster invests heavily in R&D to boost the performance, reliability and cost-efficiency of its lidar technologies. In 2024, R&D spending represented a notable 52.2% of the company’s revenues, highlighting its commitment to advancing the proprietary digital lidar platform and maintaining a competitive edge in a rapidly evolving landscape.

This focus on innovation is particularly vital as Ouster transitions from a hardware-centric model to a more software-driven, recurring-revenue approach. Through sustained R&D investment, the company is enhancing sensor range and resolution, reducing production costs and developing edge-computing capabilities, key drivers of broader adoption across the automotive and industrial sectors. These developments strengthen Ouster’s value proposition to OEMs and enterprise customers, paving the way for scalability and improved margins.

Furthermore, R&D enables Ouster to tap into new applications and markets, such as smart cities and logistics automation. By customizing its solutions and aligning with evolving regulatory requirements, the company remains agile and responsive to global demand and emerging trends.

Ouster’s financial performance is significantly dependent on the ability to maintain this leading position, which is further dependent on the investments it makes in research and development. In essence, OUST’s R&D investments are not just operational expenses but strategic assets that fuel innovation, expand market opportunities and reinforce its vision to make lidar technology ubiquitous across industries.

What About OUST’s Competitors?

Aeva Technologies AEVA fuels its growth through strong R&D investment, advancing proprietary FMCW LiDAR technology. By enhancing performance, miniaturization and integration of 4D sensing solutions, Aeva Technologies strengthens its position in key markets. Continued innovation keeps Aeva Technologies competitive in autonomous vehicles, industrial automation and consumer electronics.

Luminar Technologies LAZR relies heavily on R&D to drive innovation in its advanced LiDAR sensors and software. Through consistent R&D investment, Luminar Technologies improves product range, resolution and reliability. These advancements position Luminar Technologies as a key partner for leading automotive OEMs and support its long-term growth.

OUST’s Price Performance

Shares of OUST have gained 86% year to date, outperforming the industry.

OUST’s Expensive Valuation

OUST is currently expensive. It is trading at a price-to-sales multiple of 6.85, higher than the industry average of 1.66. OUST has a Value Score of F.

Estimates for OUST Witness Northward Movement

The Zacks Consensus Estimate for OUST’s second-quarter and third-quarter 2025 EPS has moved up 11.1% and 11.5%, respectively, over the past 60 days. The same for 2025 and 2026 has moved 12.1% and 14.3% north, respectively, in the same period.

The consensus estimate for OUST’s 2025 and 2026 revenues indicates year-over-year increases. The same for OUST’s 2025 and 2026 EPS indicates year-over-year increases.  

OUST currently carries a Zacks Rank #2 (Buy). 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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