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    We Think Ouster (NASDAQ:OUST) Can Easily Afford To Drive Business Growth

    Simply Wall St·02/09/2026 10:25:58
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    Just because a business does not make any money, does not mean that the stock will go down. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.

    Given this risk, we thought we'd take a look at whether Ouster (NASDAQ:OUST) shareholders should be worried about its cash burn. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'.

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    How Long Is Ouster's Cash Runway?

    A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. In September 2025, Ouster had US$245m in cash, and was debt-free. In the last year, its cash burn was US$32m. So it had a cash runway of about 7.7 years from September 2025. Importantly, though, analysts think that Ouster will reach cashflow breakeven before then. In that case, it may never reach the end of its cash runway. You can see how its cash balance has changed over time in the image below.

    debt-equity-history-analysis
    NasdaqGS:OUST Debt to Equity History February 9th 2026

    Check out our latest analysis for Ouster

    How Well Is Ouster Growing?

    We reckon the fact that Ouster managed to shrink its cash burn by 45% over the last year is rather encouraging. And considering that its operating revenue gained 30% during that period, that's great to see. It seems to be growing nicely. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

    How Easily Can Ouster Raise Cash?

    While Ouster seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

    Ouster's cash burn of US$32m is about 2.7% of its US$1.2b market capitalisation. So it could almost certainly just borrow a little to fund another year's growth, or else easily raise the cash by issuing a few shares.

    Is Ouster's Cash Burn A Worry?

    As you can probably tell by now, we're not too worried about Ouster's cash burn. For example, we think its cash runway suggests that the company is on a good path. But it's fair to say that its cash burn reduction was also very reassuring. One real positive is that analysts are forecasting that the company will reach breakeven. Taking all the factors in this report into account, we're not at all worried about its cash burn, as the business appears well capitalized to spend as needs be. Its important for readers to be cognizant of the risks that can affect the company's operations, and we've picked out 4 warning signs for Ouster that investors should know when investing in the stock.

    If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.