Please ensure Javascript is enabled for purposes of website accessibility

Why Ouster Stock Is Soaring Today

By John Rosevear - Apr 7, 2021 at 2:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A key analyst thinks lidar investors are overlooking the company.

What happened

Shares of Ouster (OUST -0.39%), a maker of digital lidar sensor systems, were trading sharply higher on Wednesday afternoon after a Wall Street analyst initiated coverage with a bullish note.

As of 2 p.m. EDT, Ouster's shares were up about 35.6% from Tuesday's closing price. 

So what

In a new note released on Wednesday morning, Citibank analyst Itay Michaeli initiated coverage of Ouster with a buy rating and a price target of $17.

Michaeli wrote that the company appears particularly well positioned in comparison to other newly public lidar makers because of its "unique" digital sensors and its leading position in vertical markets outside of autos.

Ouster sells its lidar sensors packaged with software optimized for a variety of industrial and robotics applications, in addition to its offerings for automobiles and heavy trucks. 

An Ouster lidar sensor, pictured with a mining operation in the background.

Ouster already has hundreds of customers for its lidar sensors, including Waytous, a maker of autonomous mining equipment. Image source: Ouster.

Lidar, short for laser detection and ranging, is increasingly used in advanced driver-assist systems and is considered essential by most experts in self-driving vehicles. 

Now what

Michaeli thinks Ouster's share price is "disconnected" from its standing in the industry. Despite the fact that the company just went public last month, investors should realize that it's not a start-up: Ouster already has hundreds of customers for its products. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ouster, Inc. Stock Quote
Ouster, Inc.
OUST
$2.55 (-0.39%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.