A recent article by Nanalyze, a financial research firm that specializes in technology, analyzes the market potential for digital lidar. They conclude that Ouster Stock is currently worth an investment more than any of its competitors in the Lidar market.
Potential of Lidar in general
Before focussing on Ouster individually, it is important to consider the market potential of Lidar in general. Nanalyze does so by estimating the total addressable markets (TAM), therefore estimating the overall revenue opportunity for the technology. Although "TAM estimates are usually so varied that they've largely become useless" from the point of view of experts at Nanalyze, it is still clear that Lidar addresses only a tiny share of the overall market right now.
The strongest growing company that will be able to get ahead of the competition soon will therefore have an even higher growth potential in the future.
Why Ouster is ahead of the competition
From a financial point of view, Ouster's diversification amongst various branches is a good selling point - applications are ranging from automotive and robotics to smart infrastructure and industrial. In 2021 they were not reliable on a single customer, as their revenue came from more than 600 customers. Due to the fact that no single customer accounted for more than 10% of Ouster's revenue, their stream of income is truly diversified.
As of October 2021, Sense Photonics is now a part of Ouster as it got acquired to further increase their potential in the automotive market. Sense Photonics is a developer of solid-state flash lidar, which will start production in 2025. Known as the DF Series, these sensors will play a key role in the company's new division, Ouster Automotive.
In contrast to most of its competitors, the ratio between market capitalization and Q4-2021 revenues is significantly lower. Whereas this ratio is as high as 98 for Luminar, one of Ouster's biggest competitors, it is only 14 for Ouster. The link to a detailed comparison table is provided below.
The way into the future
In 2021, smart infrastructure applications made up for the strongest growing sector. Ouster therefore also expects the biggest potential opportunity in this sector in the future. If we consider the various branches that integrate Ouster sensors and their individual growth potential and add that up to the total growth potential, it becomes clear that Ouster is dealing with a potentially enormous demand of their sensors in the future.
Published on the platform Seeking Alpha, another article also concludes that Ouster stock is "deeply undervalued" and "the safest bet for investors looking for entry into lidar technology".
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