How the 300% Surge in Ouster Shares Impacts Its True Value in 2025

If you have been watching Ouster stock over the past year, it is easy to see why it has become a talking point among investors weighing their next move. With shares closing at $30.65 and a staggering 303.8% return in just the last 12 months, Ouster is not exactly flying under the radar anymore. Even looking back three years, its total return stands at an impressive 112.8%, underscoring a period of major growth and heightened market attention.

What is fueling all this momentum? Some of it comes down to broader market signals, such as increased investment in LiDAR technology and optimism around applications from autonomous vehicles to smart infrastructure. Recently, as key players in Ouster’s sector have gained traction and the public’s awareness of real-world deployments has grown, the stock has ridden a rising tide of investor enthusiasm. This run-up may signal the market is re-evaluating risk and opportunity in a field once considered niche.

With such a fast climb, the natural question is whether Ouster is still a buy or if the price has already overshot the company’s true value. To help sort this out, valuation metrics can be a useful starting point. On that front, Ouster scores a 3 out of 6, passing half of the major undervaluation checks. However, numbers only tell part of the story. It is useful to break down how these scores are calculated, explore the strengths of each approach, and see if there is an even clearer way to assess where Ouster stands today.

Ouster delivered 303.8% returns over the last year. See how this stacks up to the rest of the Electronic industry.

Approach 1: Ouster Cash Flows

A Discounted Cash Flow (DCF) model takes all the cash Ouster is expected to generate in the future and estimates what those future dollars are worth in today's terms. This helps investors judge what the stock should really be worth based on its fundamental business, not just market hype.

Currently, Ouster's Free Cash Flow stands at a negative $18 million, but analysts predict a rapid turnaround. In five years, cash flows are projected to shift from negative figures to a positive $61 million by the end of 2029. Further projections, extrapolated beyond analysts’ estimates, show continued growth, with cash flow reaching well above $210 million by 2035. These projections indicate a company expected to accelerate out of its current losses.

Based on these projections, the DCF approach estimates Ouster's intrinsic value at $44.23 per share. With its recent closing price at $30.65, Ouster appears 30.7% undervalued according to this model. This suggests the current price is significantly below what future cash flows may warrant.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Ouster.

Our DCF analysis suggests Ouster is undervalued by 30.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Ouster Price vs Sales

The Price-to-Sales (P/S) ratio is widely used to value companies that are not yet profitable, such as Ouster. This metric is especially relevant for early-stage innovators where strong revenue growth is considered more important than immediate profits. Investors use the P/S ratio to assess what the market is willing to pay for each dollar of revenue, making it a key tool for high-growth technology businesses.

Growth expectations and risk play a significant role in determining what is considered a “normal” or fair P/S ratio. Fast-growing and less risky companies typically justify higher multiples, while those with uncertain prospects or slower growth tend to have lower ones. Currently, Ouster trades at a 14.08x P/S ratio. In comparison, the industry average is 2.40x, and direct peers average 20.29x. This highlights how valuations can vary significantly depending on business outlook and market perception.

To help interpret these numbers, Simply Wall St’s “Fair Ratio” offers a custom benchmark of 4.58x. This figure reflects Ouster’s specific combination of revenue growth, industry landscape, risks, profit margins, and market cap, rather than a generalized comparison. Since the Fair Ratio accounts for Ouster’s unique fundamentals, it can serve as a more tailored gauge of value than a simple industry or peer comparison. At nearly three times its Fair Ratio, Ouster appears expensive on a sales basis, with its current price suggesting that high growth expectations are already reflected.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ouster Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. Narratives are approachable story-based forecasts that allow you to capture your own perspective on a company beyond just numbers, connecting Ouster’s business outlook with your projections for future revenue, margins, and fair value.

With Narratives, you connect the company’s growth story to a specific forecast and then instantly see what that means for fair value, making the reasoning behind your investment decision clear and personal. This tool, already used by millions on Simply Wall St’s Community page, helps you visualize exactly when you believe Ouster is a buy or a sell by directly comparing your calculated Fair Value to the current share price.

Narratives are dynamic, updating as new news, earnings, or industry developments arrive, allowing your viewpoint to stay current without any heavy lifting. For example, some Ouster Narratives currently estimate fair value at $50 per share based on rapid tech adoption, while others see it closer to $30 reflecting concerns about slow production scaling and profitability. With Narratives, you are empowered to choose the scenario that best matches your conviction, letting you see instantly whether the price justifies your next move.

Do you think there's more to the story for Ouster? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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