11 Best Lidar Stocks to Buy According to Hedge Funds

5. Ouster, Inc. (NASDAQ:OUST)

Number of Hedge Fund Holders: 13

Ouster, Inc. (NASDAQ:OUST) is one of the largest American companies that comes as close as possible to a pure-play LiDAR company. It develops and manufactures high-performance LiDAR sensors for several sectors, mostly automotive.

According to CEO Angus Pacala, the company reported record results in Q3 2024, thanks to the increased adoption of the REV7 sensors. Revenue increased by 26% year over year to $28 million, and the non-GAAP gross margin was 45%, compared to 33% in Q3 2023. Adjusted EBITDA loss also improved to $10 million from $18 million a year ago. More than 3,900 sensors were shipped during the quarter.

However, it appears that the company has yet to show what it can do in terms of revenue generated. In mid-January, Ouster, Inc. (NASDAQ:OUST) won a $2 million contract to deploy its traffic management solution in Chattanooga, Tennessee. A successful pilot has already been undertaken, and BlueCity, the traffic management solution, will now be installed across 120 intersections.

And the customer is already loving it. Chattanooga Mayor Tim Kelly commented on the project, saying:

“Using American lidar and advanced perception software from Ouster, we are building the largest lidar-powered smart traffic network in the United States. This technology will enable optimized traffic signal management on roads and intersections to improve traffic flow and provide data we can use to improve pedestrian safety.”

Ouster, Inc. (NASDAQ:OUST) can and will try to sell this technology to more cities across the country. If this happens, the company faces a horizon with unlimited revenue potential. This might also explain why the stock has been on a roll over the past year, gaining 81.47% in the past 12 months. Northland Capital Markets initiated coverage of Ouster shares with an “Outperform” rating. The target price is $10.96 per share—the current price (February 13) is just $1 shy of this target.