Ouster [OUST]
as of 2026-07-29 · spot $31.30 (SIP close) · two outputs, both required
Per references/valuation.md, this document produces two outputs over two horizons. Reporting only one is
the defect that file exists to prevent.
| Output | Horizon | Result |
|---|---|---|
| Implied-path test (the Valuation Criteria) | 5 years | FAIL. Requires 47.5% revenue CAGR vs 31.9% demonstrated — margin −15.6pp |
| 12-month target | 12 months | $23.28, −25.6% to spot. Own-multiple percentile stated; the multiple is identified, not borrowed |
| Input | Value | Source / adjustment |
|---|---|---|
| Spot | $31.30 | Alpaca SIP close, 2026-07-29. The screen used the IEX close of 2026-07-28 ($33.88); SIP that day was $33.91 |
| Shares | 67,294,825 | 63,672,949 (Q1-2026 10-Q cover, 2026-05-01) + 3,621,876 issued 2026-07-06 (8-K). Excludes the 543,281 over-allotment (option live to ~2026-08-01, no 8-K reporting exercise) and any ATM sales, both of which push the count up. Sensitivity to 71.14m in §5 |
| Market cap | $2,106m | 67.294825m × $31.30. The screen's $2,157m used the stale count and the stale price |
| Net cash | $355.0m | $173.118m at 2026-03-31 (cash $78.720m + short-term investments $94.398m, verified as two distinct balance-sheet lines, zero debt) + $191.9m July net proceeds − ~$10m of Q2/Q3 burn. Operating leases of $17.385m are excluded, consistent with the screen's treatment of this name; net of them it is $337.6m |
| EV | $1,751m | The screen's $1,984m is 13% too high, because the stale net cash dominates the stale share count |
| TTM revenue, as reported | $185.330m | Verified: $35.049 + $39.525 + $62.178 + $48.578 |
| TTM revenue, clean | $163.730m | Less $21.6m of IP-licence royalty inside the TTM window ($22.8m FY2025 − $1.5m in Q1-25, which falls outside, + $0.3m in Q1-26) |
| EV / TTM revenue | 9.4x reported, 10.7x clean | Screen: 10.71x — right number, wrong inputs on both sides |
| Demonstrated revenue CAGR | 31.9% | FY2024 $111.101m → FY2025 clean $146.584m. Corroborated by the Q1-2026 pro-forma +46.1%. Not the screen's 60.4%, which starts pre-Velodyne |
| WACC | 12.0% | Not derived from a beta regression here — declared as an assumption. 252-day realised volatility is 104.9%; an equity-only discount rate below 12% would be indefensible and above 15% would make almost anything fail, so the parameter is carried explicitly and sensitised in §5 |
| Terminal EBIT margin | UNIDENTIFIED | See §2 |
| Exit multiple | UNIDENTIFIED as a point estimate; grid run 12x–30x | See §3 |
Ouster has never earned an operating profit. The single quarter of positive operating income in its filed history — Q4 2025, +$0.904m — contains $16.1m of cumulative prior-year royalty catch-up. Remove it and Q4 2025 is −$15.2m, and the streak of operating losses is unbroken from the 2021 de-SPAC to the present.
The screen assigned 13.5%, described as "industry median of mature profitable peers (pre-profit subject)". That is rejected. It is the exact construction that produced the +51pp error on ADMA and the +32pp error on INOD in this project's record: substituting a mature-peer median for an unobserved parameter on a company that has never demonstrated it, then reporting a spuriously precise required growth rate on top.
Declared: terminal EBIT margin UNIDENTIFIED. What follows is a grid, not a number.
The one thing that is observable is the gross margin, and it is better than the screen's input suggests once the royalty is stripped out — 41.4% for FY2025 clean (from 36.4% in FY2024) and 42.5% in Q1-2026 clean (from 38.5% a year earlier). It is rising 4–5pp a year. That constrains the grid usefully: any terminal EBIT margin above ~30% requires the gross margin to exceed 45% and operating expenses to fall below 13% of revenue from today's 82%. The 25% and 30% rows below are therefore arithmetic, not forecasts, and the defensible region of the grid is the 5%–20% band.
Method: assets/reverse_dcf.py. Solved for the revenue CAGR, with terminal margin and exit multiple held
fixed and both named in every cell. 5 years, WACC 12.0%, EV $1,751m.
| Terminal EBIT margin ↓ / exit EBIT multiple → | 12x | 15x | 18x | 22x | 30x |
|---|---|---|---|---|---|
| 5% | 99.3% | 90.6% | 83.7% | 76.5% | 65.9% |
| 10% | 73.5% | 65.9% | 60.0% | 53.7% | 44.4% |
| 15% | 60.0% | 53.0% | 47.5% | 41.7% | 33.2% |
| 20% | 51.0% | 44.4% | 39.3% | 33.8% | 25.7% |
| 25% | 44.4% | 38.1% | 33.2% | 27.9% | 20.2% |
| 30% | 39.3% | 33.2% | 28.4% | 23.4% | 15.9% |
| Terminal margin ↓ / multiple → | 12x | 15x | 18x | 22x | 30x |
|---|---|---|---|---|---|
| 10% | 69.2% | 61.8% | 56.0% | 49.9% | 40.9% |
| 15% | 56.0% | 49.2% | 43.9% | 38.2% | 29.9% |
| 20% | 47.3% | 40.9% | 35.8% | 30.5% | 22.7% |
The royalty catch-up moves the required CAGR by ~3.6pp at the central cell. Not the largest of the errors in this memo, but it moves the answer in the wrong direction and it is entirely avoidable.
At a terminal EBIT margin of 15.0% and an exit multiple of 18.0x EBIT, discounting at 12.0% over 5 years from a clean TTM revenue base of $163.73m and an EV of $1,751m, today's price requires a 5-year revenue CAGR of 47.5%.
Demonstrated: 31.9%. Margin (demonstrated − required): −15.6pp.
Holding the demonstrated 31.9% CAGR:
| Terminal EBIT margin | Required exit EBIT multiple | Note |
|---|---|---|
| 10% | 47.2x | |
| 15% | 31.5x | |
| 20% | 23.6x | The only cell inside a defensible range |
And at the screen's own assumptions (13.5% terminal margin, 24.5x exit multiple), the price requires a
41.6% CAGR — a −9.7pp margin. So the screen's parameters, taken at face value, also fail the test; the
screen simply never reported the comparison, because its reverse_dcf returned "unsolvable in range" against a
60.4% demonstrated CAGR that the merger had manufactured.
Today's EV/EBIT is undefined — there is no EBIT. The compression must therefore be stated on sales:
FAIL. The price requires materially more than demonstrated (−15.6pp), and per criteria.md a PASS WITH
ARGUMENT requires a specific, evidenced reason for the gap — a named product cycle, mix shift or pricing
action. Ouster has named products (REV7, Blue City, Gemini, the Stereolabs stack) but the evidence points the
wrong way on price: the FY2025 10-K and the Q1-2026 10-Q both cite lower ASPs, and REV7 — the product the
10-K credited with the Americas increase — is mentioned zero times in the latest 10-Q. There is no contracted
backlog anywhere in the filings to support the path: "backlog" appears zero times in the FY2025 10-K.
The one evidenced argument that does exist is the clean gross-margin trend (36.4% → 41.4% → 42.5%, rising 4–5pp a year). It is real and it is stated. But it argues for a higher terminal margin, and reading §3.1 across that row, even a 20% terminal margin still requires 39.3% at 18x against 31.9% demonstrated — a −7.4pp margin. The evidenced argument narrows the failure from 15.6pp to 7.4pp; it does not close it. That is a PASS WITH ARGUMENT only if a book is willing to underwrite both a 20% terminal EBIT margin from −40% today and a 23.6x exit multiple. FAIL.
Terminal value is 100% of EV in this construction (there is no interim free cash flow to discount — Ouster
burns cash), so per criteria.md the reverse DCF is mandatory as the primary output and the sensitivity must
be run on the highest-variance parameter. That parameter is the exit multiple, and §3.1 is that sensitivity: the
required CAGR moves from 60.0% at 12x to 33.2% at 30x at a 15% terminal margin — a 26.8pp range from the
multiple alone, versus a 15.6pp margin to demonstrated. The multiple assumption is larger than the answer.
That is the honest statement, and it is the statement NTRA's memo failed to make when it ran its range across scenario probabilities.
The test flips to PASS where required ≤ demonstrated (31.9%). Reading §3.1: that happens at
A 20% terminal EBIT margin at 23.6x is not an absurd combination — and this is the material difference
between OUST and ASTS in this cluster. OUST's price is demanding but reachable; ASTS's is not reachable
anywhere in the parameter space (see ASTS_Valuation.md). The flip requires Ouster to reach an operating margin
it has never posted, from −40%, which is a real hurdle — but it is a hurdle, not a wall.
The share count is the second-largest uncertainty, because ATM usage is undisclosed.
| Shares | Market cap | EV | Required CAGR (15% TM, 18x) |
|---|---|---|---|
| 63.673m (screen) | $1,993m | $1,638m | 46.0% |
| 67.295m (base) | $2,106m | $1,751m | 47.5% |
| 71.138m (+ over-allotment + full $100m ATM at ~$30) | $2,227m | $1,872m | 48.9% |
A 2.9pp range. The share-count uncertainty does not change the verdict — which is worth saying, because on BLLN (4.1x) and SMR (54%) share-count errors were decisive.
Built per valuation.md: near-term revenue, plus named events inside 12 months, on Ouster's own multiple
history with the percentile stated. Not a DCF and not a peer median.
Computed at each quarter end from the filed balance sheet and the SIP close on that date. Ten observations, all post-Velodyne, so the series does not span the merger regime change.
| Quarter end | Price | Shares (m) | Net cash ($m) | TTM revenue ($m) | EV/TTM sales |
|---|---|---|---|---|---|
| 2023-12-31 | 7.67 | 40.7 | 190.1 | 83.3 | 1.5x |
| 2024-03-31 | 7.94 | 45.2 | 187.8 | 92.0 | 1.9x |
| 2024-06-30 | 9.83 | 48.3 | 184.2 | 99.6 | 2.9x |
| 2024-09-30 | 6.30 | 49.8 | 151.4 | 105.5 | 1.5x |
| 2024-12-31 | 12.22 | 53.8 | 172.0 | 111.1 | 4.4x |
| 2025-03-31 | 8.98 | 53.8 | 168.2 | 117.8 | 2.7x |
| 2025-06-30 | 24.25 | 57.8 | 226.5 | 125.8 | 9.3x |
| 2025-09-30 | 27.05 | 60.0 | 244.5 | 143.3 | 9.6x ← max |
| 2025-12-31 | 21.64 | 62.8 | 208.6 | 169.4 | 6.8x |
| 2026-03-31 | 18.37 | 63.7 | 173.1 | 185.3 | 5.4x |
| today | 31.30 | 67.3 | 355.0 | 185.3 | 9.4x |
Median 3.6x · min 1.5x · max 9.6x · today 9.4x = the 90th percentile of its own history.
The multiple is IDENTIFIED — ten quarters, one regime, adequate dispersion (1.5x to 9.6x). No peer median is used or needed.
No consensus pull was made (Alpha Vantage quota assumed exhausted; Consensus Criteria INDETERMINATE, blocking nothing). The base is built from the company's own reported trajectory:
| Multiple | Percentile of own history | NTM revenue | Implied EV | + net cash | Shares | Target | vs spot | |
|---|---|---|---|---|---|---|---|---|
| Bear | 2.7x | 30th | $190m | $513m | $355m | 71.1m | $12.20 | −61.0% |
| Base | 5.4x | 60th | $225m | $1,215m | $355m | 71.1m | $22.10 | −29.4% |
| Bull | 9.6x | 100th (own max) | $250m | $2,400m | $355m | 71.1m | $38.75 | +23.8% |
Probability-weighted at bear 30% / base 45% / bull 25%: $23.28, −25.6% to spot.
0.30 × 12.20 + 0.45 × 22.10 + 0.25 × 38.75 = 3.66 + 9.95 + 9.69 = 23.30 (rounding).
The base case deliberately uses the 2026-03-31 multiple of 5.4x — the most recent observation — rather than the current 9.4x, because the current multiple sits at the 90th percentile of the name's own history and mean-reverts within its own range far more reliably over twelve months than it converges anywhere else. Shares are taken at the top of the range (71.1m) in all three cases because the S-3ASR and the live ATM make further issuance the default expectation, not a scenario.
Each appears with a date in OUST_Catalyst_Calendar.md. The two that can move the multiple rather than the
numbers: the Q2-2026 gross margin print (does the clean margin recover above 46%, or has ASP compression
taken hold?) and the first disclosure of ATM usage, which sets the true share count.
Calibration item B16 records 16 of 16 house targets below spot, a median 46.1% below Street, and
valuation.md states plainly that "expect targets above spot to be common" and that a process whose every
target is below spot is expressing a house view about the market rather than valuing companies.
This target is 25.6% below spot, and the reason is specific and checkable: the stock is 43% below the price at which the company itself sold equity three weeks ago and it still trades at the 90th percentile of its own five-year EV/sales range. The bull case is above spot at +24%, which is the check that the construction is not mechanically bearish: the band spans −61% to +24% and only the weighting puts the point estimate below. If the book's view is that a 46% grower deserves the top of its own multiple range, the bull case is the answer and it is +24%, not negative.
No external professional target was available for the sanity band; that gap is stated rather than filled.