Ouster, Inc (OUST) Stock Forecast & Price Target

Ouster is a company with a strong growth potential, as seen from its solid beat against 2Q26 expectations, which we attribute to the early stages of Rev8 LiDAR production and view as a key multiyear growth driver across various end markets. Despite a slightly below-consensus 3Q26 revenue guidance due to the ramp-up of Rev8 production, we see this as an attractive opportunity to own shares in a company with leading edge sensors and positioned for physical AI applications. Ouster's strong financials, including a record 8100 LiDAR sensors shipped in 4Q25 and expected annual revenue growth of 30%-50% and GAAP gross margins of 35%-40%, further support our positive outlook.

Ouster is facing widespread competition as indicated by its declining sales and gross margins over successive quarters. Customer concentration is a significant risk for Ouster, as its top customer accounted for a substantial portion of its FY25 bookings, indicating potential overreliance on a single source of revenue. With only one operating segment and a niche focus on lidar sensors, Ouster may struggle to diversify and expand its product offerings, making it vulnerable to changes in market demand.