Will Ouster's (OUST) Global Push Redefine Its Competitive Edge in High-Margin Software?

• Ouster recently identified international expansion as a critical part of its growth plan, aiming to access broader lidar and smart infrastructure markets through targeted distribution partnerships.
• This move is designed not only to boost revenue but also to mitigate customer concentration risk and accelerate growth in higher-margin software and analytics offerings such as BlueCity and Gemini.
• Next, we’ll explore how Ouster’s expanded global reach and distribution partnerships could reshape its long-term investment narrative.

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Ouster Investment Narrative Recap

To be a shareholder in Ouster, you need to believe in the company's ability to leverage advanced lidar and smart infrastructure technology for large-scale commercial success, with meaningful revenue from both hardware and higher-margin software. While the recent international expansion signals ambition and may aid in reducing customer concentration and scaling software like BlueCity, it does not materially alter the key short-term catalyst, which remains capturing more Intelligent Transportation Systems contracts, nor does it diminish the biggest risk of price pressure from formidable Chinese competitors.

The May 2025 agreement to deploy Ouster’s 3D lidar technology across Europe with LASE PeCo stands out as the most relevant recent announcement, showing tangible progress in international markets. This supports Ouster's push into global markets, directly linked to securing new deployments of BlueCity and Gemini, which could help accelerate both short-term adoption and longer-term profitability goals.

However, investors should be aware that, despite growing international partnerships, there remains a considerable threat from aggressive pricing by Chinese lidar manufacturers, meaning...

Read the full narrative on Ouster (it's free!)

Ouster's outlook anticipates $335.6 million in revenue and $30.3 million in earnings by 2028. This scenario depends on a 38.7% annual revenue growth rate and a $122.3 million improvement in earnings from the current loss of $-92.0 million.

Uncover how Ouster's forecasts yield a $35.00 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Twelve fair value estimates from the Simply Wall St Community range from US$5.77 to US$64.46, highlighting sharp differences in how investors assess Ouster’s potential. With pricing risk from Chinese competitors still in play, be sure to consider several perspectives when forming your view on the company.

Explore 12 other fair value estimates on Ouster - why the stock might be worth less than half the current price!

Build Your Own Ouster Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ouster research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Ouster research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ouster's overall financial health at a glance.

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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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