How to Value Unprofitable Businesses: Ouster (OUST Stock) Example -- Normalized Profit Calculator
Chip Stock Investor PodcastShow Notes
Ouster stock: what has to go right over the next 10 years to justify ~$41 a share?
In this video: Ouster’s (OUST) Q2 2026 results, why plunging LiDAR sensor prices are actually good news, and how to value an unprofitable growth company with our new normalized profit and peer benchmarking calculator.
Ouster grew revenue 56% year over year to $55M in Q2 2026, more than tripled sensor shipments to over 17,000, and pushed GAAP gross margin to 49%, all while holding operating expenses nearly flat. But it still runs a −37% operating margin and −28% free cash flow margin. Our normalized profit scenario shows today’s price already assumes about 30% annual revenue growth for a decade and a 20% FCF margin. That makes OUST a hold in our small bets basket, with a closer look if shares fall toward $30.
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Chapters 00:00 Intro: Ouster (OUST) and our small bets basket 00:40 Where Ouster fits in the end-market cycle: auto, industrial, and physical AI 02:55 Q2 2026 results: color LiDAR and 56% revenue growth 04:20 Falling selling prices and the Jevons paradox 05:15 Q3 guidance, gross margin, and operating expense control 06:55 The financials: operating and free cash flow margins 08:45 Reverse DCF and “pretend profitability” 10:05 Peer group benchmarking: Hesai, Aeva, Teledyne 12:10 Normalized profit calculator walkthrough 13:55 Adding a margin of safety 15:10 Other checks: balance sheet, cash, and share dilution 15:55 Our take: hold, and the price levels we’re watching
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Disclaimer: For education only — not financial advice. Do your own research. Ownership: CSI owns shares of Ouster as of publication. Positions can change without notice.
#Ouster #LiDAR #Semiconductors
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