We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ouster Is Up 70% YTD: Time to Buy More, Hold or Book Profits?
Read MoreHide Full Article
Key Takeaways
Ouster is up more than 70% YTD, but elevated valuation and ongoing losses weaken the risk-reward.
Rev8, Physical AI adoption and the StereoLabs deal expand Ouster's growth opportunities across new markets.
OUST sees Q3 revenues of $54.5M-$57.5M as royalty revenues fall, increasing pressure on product growth.
Ouster Inc. (OUST - Free Report) has been one of the standout performers in the lidar space this year. Shares have gained more than 70% year to date, sharply outperforming peers such as Aeva Technologies (AEVA - Free Report) , Hesai Group (HSAI - Free Report) and Innoviz Technologies (INVZ - Free Report) . While Aeva has risen 22%, Hesai and Innoviz have declined 17% and 59%, respectively, over the same period.
YTD Price Performance Comparison
Image Source: Zacks Investment Research
There is plenty to like about Ouster's growth story. The company is benefiting from rising adoption of Physical AI, expanding smart-infrastructure deployments and demand for its next-generation Rev8 lidar. Its February 2026 acquisition of StereoLabs has also broadened the opportunity beyond traditional lidar into cameras, edge AI and perception software.
But after such a powerful rally, the question is no longer whether Ouster has a promising future. The more important question is whether enough of that future is already reflected in the stock. At current levels, would investors want to consider taking some profits or chase the rally? Let’s dig deeper.
Ouster Has a Compelling Growth Story
The acquisition of StereoLabs gives Ouster an integrated sensing and perception platform combining digital lidar, ZED cameras, edge AI computing and software. That expands its addressable market into robotics, warehouse automation, industrial equipment, drones and humanoid robots. StereoLabs is also working with Trossen Robotics on synchronized, multi-view vision systems designed to support Physical AI training for robots.
The company's Rev8 launch adds another important growth driver. Shipping since May 2026, Rev8 is positioned as the industry's first native-color lidar and is qualified for NVIDIA DRIVE Hyperion. Ouster has already secured partnerships with FieldAI, Gecko Robotics, FUJIFILM and ARGUS Interception, while its GeoCue partnership is targeting survey-grade data for utility and infrastructure applications.
Second-quarter results also provided encouraging signs, including record sensor shipments and multiple million-dollar-plus Rev8 orders. Deeper NVIDIA integration further strengthens Ouster's positioning as Physical AI develops.
In other words, the rally isn't without fundamentals behind it. Ouster has a broader product portfolio, a larger potential market and several catalysts that could support significant growth over the longer term.
But OUST Stock is Pricing in Too Much Success
The problem is that investors are increasingly paying for that potential before it has fully translated into earnings.
Ouster trades at roughly 9.7 times forward 12-month sales. That is below Aeva's 15.3 times, but still carries a meaningful premium to Innoviz and Hesai. Ouster carries a Value Score of F.
OUST's F12M P/S Vs. AEVA, INVZ, HSAI
Image Source: Zacks Investment Research
More importantly, Ouster remains loss-making. Adjusted EBITDA was negative $4 million in the last reported quarter, while GAAP operating expenses reached $47 million, up about 10% year over year.
Those costs are unlikely to fall immediately. Management expects third-quarter operating expenses to remain 5-8% above the prior-year level as it continues investing in StereoLabs integration, Rev8, ZED X Nano and Physical AI solutions.
That leaves Ouster needing both strong revenue growth and operating leverage to validate its valuation. The market appears willing to wait for that payoff—but after a 70% rally, the margin for disappointment is much smaller.
Rev8 Is Promising, But Execution Still Matters
Rev8 could become a major contributor to Ouster's growth, but its success still depends on a successful production ramp.
The company has secured meaningful early orders, yet converting those orders into repeat, scaled shipments is the next test. Manufacturing execution, supplier availability and production yields will determine how quickly customer interest becomes reported revenues.
That matters because Ouster's near-term numbers do not yet point to explosive acceleration. The company expects third-quarter revenues of $54.5 million-$57.5 million, compared with $55 million in the second quarter. The midpoint of the range therefore implies only modest sequential growth.
The timing of Rev8 production explains much of this, with volumes expected to build toward the latter part of the third quarter.
There is also a less favorable revenue mix ahead. Ouster expects about $5 million of royalty revenues in 2026, down sharply from $22.8 million in 2025. That puts greater pressure on product volumes, margins and operating efficiency to drive the next phase of growth.
Time to Take Some Money Off the Table?
Estimates for the company’s bottom line have deteriorated over the past 60 days.
Image Source: Zacks Investment Research
Ouster has a credible long-term opportunity, but the stock has run too far, too fast. With valuation elevated, profitability still out of reach and earnings estimates deteriorating, the risk-reward looks unfavorable. After a strong year-to-date rally, investors should book profits now.
OUST stock currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Ouster Is Up 70% YTD: Time to Buy More, Hold or Book Profits?
Key Takeaways
Ouster Inc. (OUST - Free Report) has been one of the standout performers in the lidar space this year. Shares have gained more than 70% year to date, sharply outperforming peers such as Aeva Technologies (AEVA - Free Report) , Hesai Group (HSAI - Free Report) and Innoviz Technologies (INVZ - Free Report) . While Aeva has risen 22%, Hesai and Innoviz have declined 17% and 59%, respectively, over the same period.
YTD Price Performance Comparison
There is plenty to like about Ouster's growth story. The company is benefiting from rising adoption of Physical AI, expanding smart-infrastructure deployments and demand for its next-generation Rev8 lidar. Its February 2026 acquisition of StereoLabs has also broadened the opportunity beyond traditional lidar into cameras, edge AI and perception software.
But after such a powerful rally, the question is no longer whether Ouster has a promising future. The more important question is whether enough of that future is already reflected in the stock. At current levels, would investors want to consider taking some profits or chase the rally? Let’s dig deeper.
Ouster Has a Compelling Growth Story
The acquisition of StereoLabs gives Ouster an integrated sensing and perception platform combining digital lidar, ZED cameras, edge AI computing and software. That expands its addressable market into robotics, warehouse automation, industrial equipment, drones and humanoid robots. StereoLabs is also working with Trossen Robotics on synchronized, multi-view vision systems designed to support Physical AI training for robots.
The company's Rev8 launch adds another important growth driver. Shipping since May 2026, Rev8 is positioned as the industry's first native-color lidar and is qualified for NVIDIA DRIVE Hyperion. Ouster has already secured partnerships with FieldAI, Gecko Robotics, FUJIFILM and ARGUS Interception, while its GeoCue partnership is targeting survey-grade data for utility and infrastructure applications.
Second-quarter results also provided encouraging signs, including record sensor shipments and multiple million-dollar-plus Rev8 orders. Deeper NVIDIA integration further strengthens Ouster's positioning as Physical AI develops.
In other words, the rally isn't without fundamentals behind it. Ouster has a broader product portfolio, a larger potential market and several catalysts that could support significant growth over the longer term.
But OUST Stock is Pricing in Too Much Success
The problem is that investors are increasingly paying for that potential before it has fully translated into earnings.
Ouster trades at roughly 9.7 times forward 12-month sales. That is below Aeva's 15.3 times, but still carries a meaningful premium to Innoviz and Hesai. Ouster carries a Value Score of F.
OUST's F12M P/S Vs. AEVA, INVZ, HSAI
More importantly, Ouster remains loss-making. Adjusted EBITDA was negative $4 million in the last reported quarter, while GAAP operating expenses reached $47 million, up about 10% year over year.
Those costs are unlikely to fall immediately. Management expects third-quarter operating expenses to remain 5-8% above the prior-year level as it continues investing in StereoLabs integration, Rev8, ZED X Nano and Physical AI solutions.
That leaves Ouster needing both strong revenue growth and operating leverage to validate its valuation. The market appears willing to wait for that payoff—but after a 70% rally, the margin for disappointment is much smaller.
Rev8 Is Promising, But Execution Still Matters
Rev8 could become a major contributor to Ouster's growth, but its success still depends on a successful production ramp.
The company has secured meaningful early orders, yet converting those orders into repeat, scaled shipments is the next test. Manufacturing execution, supplier availability and production yields will determine how quickly customer interest becomes reported revenues.
That matters because Ouster's near-term numbers do not yet point to explosive acceleration. The company expects third-quarter revenues of $54.5 million-$57.5 million, compared with $55 million in the second quarter. The midpoint of the range therefore implies only modest sequential growth.
The timing of Rev8 production explains much of this, with volumes expected to build toward the latter part of the third quarter.
There is also a less favorable revenue mix ahead. Ouster expects about $5 million of royalty revenues in 2026, down sharply from $22.8 million in 2025. That puts greater pressure on product volumes, margins and operating efficiency to drive the next phase of growth.
Time to Take Some Money Off the Table?
Estimates for the company’s bottom line have deteriorated over the past 60 days.
Ouster has a credible long-term opportunity, but the stock has run too far, too fast. With valuation elevated, profitability still out of reach and earnings estimates deteriorating, the risk-reward looks unfavorable. After a strong year-to-date rally, investors should book profits now.
OUST stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.