Ouster Inc. (Ouster (OUST)) shares took a hit Friday after the lidar company wrapped up a $191.9 million public offering. The stock was down about 7% at $44.21, as investors digested the dilution that comes with new shares hitting the market.
Public offerings tend to weigh on stocks because they increase the number of shares outstanding, which dilutes existing shareholders' ownership. In this case, the offering was also priced below the stock's previous closing price—a discount that can trigger short-term selling as the market adjusts to the lower valuation.
The broader tech sector didn't help matters. The Nasdaq slipped 0.04%, and the technology sector fell 0.3%, though Ouster's decline was notably steeper.
Technical Picture: Pullback Within a Bullish Trend
Ouster is currently trading about 3.5% below its 20-day simple moving average of $46.40, signaling a short-term pullback. But zoom out, and the picture looks different. The stock remains 13.1% above its 50-day moving average of $39.57 and a whopping 59.4% above its 200-day moving average of $28.09.
The longer-term trend is still positive. A golden cross formed back in May, when the 50-day moving average crossed above the 200-day moving average—a classic bullish signal. The relative strength index sits at 49.78, right around neutral, suggesting buying and selling pressure are roughly balanced for now.
Technical traders might keep an eye on resistance near $49.50, with key support around $39.00—close to the 50-day moving average.
What's Next: Earnings and Analyst Views
The next big catalyst is Ouster's earnings report, expected around Aug. 6. Analysts are looking for a loss of 17 cents per share, an improvement from the 38-cent loss a year ago. Revenue is projected to jump to $50.86 million from $35.05 million.
Wall Street remains broadly bullish. The stock carries a consensus Buy rating with an average price target of $41.50. Recent analyst moves include Rosenblatt raising its forecast to $53 on May 27, Amerx initiating coverage with a Buy and a $43 target on May 11, and Cantor Fitzgerald downgrading to Neutral on May 7.
So while Friday's drop stings, the underlying story—strong revenue growth, improving losses, and a bullish technical setup—hasn't changed. Whether this is a buying opportunity or a sign of more weakness depends on how the market digests the new shares in the coming weeks.
