Can Ouster's BlueCity Expand Its LiDAR Growth Opportunity?

Ouster, Inc. OUST upgraded its BlueCity traffic management solution with Rev8 in the second quarter, potentially expanding the addressable market for its LiDAR technology. The enhanced platform, powered by the Rev8 OS1 Max, offers up to double the range and resolution of the previous generation and enables multimodal detection and classification at distances of up to 500 feet. Ouster’s native color LiDAR captures color and 3D depth simultaneously without complex calibration. 

The longer-range capability could be particularly important for larger roads and higher-speed traffic, which is likely to expand access to a broader portion of the intelligent transportation market. Ouster estimates there are roughly 300,000 signalized intersections in North America, while its deployments remain in the hundreds, suggesting substantial room for expansion if adoption continues. 

Early customer activity provides some support for this thesis. Utah, an early BlueCity adopter, moved quickly to adopt the 500-foot sensing capability with full-RGB OS1 Max sensors because of their suitability for the state’s wide roadways. Customers typically progress from proof-of-concept deployments to citywide or statewide rollouts. 

BlueCity and Gemini-based products accounted for approximately 15% of Ouster’s sales, and the company expects their contribution to increase over time. Taken together, the expanded capabilities of BlueCity, Ouster’s growing deployment base and the size of the North American intersection market suggest a meaningful runway for LiDAR demand. OUST currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Latest Expansion Efforts by Ouster’s Competitors

In May, Hesai Group HSAI announced that it had become a strategic LiDAR partner and confirmed supplier for Mercedes-Benz models, supporting Level 3 autonomous driving.  The new agreement supports Mercedes-Benz programs in Europe and China, with production aided by Hesai’s new Galileo facility in Thailand. After delivering a record 1.6 million LiDAR units in 2025, Hesai expects total shipments to approximately double this year to 3-3.5 million units, further strengthening its position as a global LiDAR industry leader.

Aeva Technologies, Inc. AEVA is positioned to benefit as LiDAR expands into higher-level ADAS and autonomy applications. In June, Bendix selected Aeva’s 4D LiDAR and perception software for its next-generation Level 2+ commercial-vehicle ADAS system. Bendix’s current solution is available on most North American Class 8 platforms, representing a roughly 300,000-unit annual truck market and extending Aeva’s opportunity into high-volume Level 2+ applications.

OUST’s Price Performance, Valuation and Estimates

Shares of Ouster have surged nearly 152% in the last six months.

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From a valuation standpoint, OUST trades at a forward price-to-sales ratio above 12x. 

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The Zacks Consensus Estimate for OUST’s 2026 and 2027 loss per share has widened 4 cents and narrowed 28 cents, respectively, in the past 30 days. 

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