Hesai Group (NasdaqGS:HSAI): Assessing Valuation After Strong Earnings and New Lidar Launch Announcement

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Hesai Group (NasdaqGS:HSAI) just delivered a set of financial results and product news that is sparking conversation among investors. For the second quarter, not only did the company grow sales by more than 50% year over year, but it also swung from a loss to a profit. At the same time, Hesai announced it will debut a new ultra-long-range lidar at IAA Mobility 2025, with the aim of pushing autonomous vehicle technology forward. These two developments are attracting attention because they impact both near-term performance and long-term innovation.

This combination of progress has emerged against a backdrop of increasing momentum for Hesai Group’s stock. Shares have gained 44% this year, and they are up over 8% in just the past month. After lagging in recent weeks, the stock’s latest upward move suggests renewed optimism, likely related to improvements in profitability and the upcoming product launch. The company’s annual revenue and net income growth rates both topped 28% and 41%, respectively, creating a narrative where investors are watching to see if sustainable growth is finally materializing.

With the stock trending higher, the question now is straightforward: Is Hesai Group getting its due, or is there still room for upside if the market is underestimating its growth story?

Most Popular Narrative: 15% Undervalued

According to the community narrative, Hesai Group is currently trading below its estimated fair value, suggesting notable upside if projected growth materializes. The narrative aggregates forward-looking analyst expectations and focuses on substantial earnings and revenue expansion as fundamental drivers.

The projection for 2025 LiDAR shipments ranges from 1.2 million to 1.5 million units, with nearly 200,000 high-margin robotic LiDAR units expected. This is anticipated to significantly boost revenue. Expected net revenues of RMB 3 billion to RMB 3.5 billion for 2025, driven by strong demand and mass market adoption, indicate potential growth in revenue.

What powers this double-digit discount to fair value goes beyond just rapid sales growth. It involves aggressive expansion plans, significant shifts in market share, and ambitious profit margin targets. Interested in the critical financial changes and assumptions that underpin this analyst outlook? Explore further to see the growth metrics truly driving this undervaluation call.

Result: Fair Value of $27.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if key clients scale back orders or profit margins face pressure from intense pricing competition, the growth narrative could quickly lose momentum.

Find out about the key risks to this Hesai Group narrative.

Another View: DCF Puts a Spotlight on Value

While the market focus has been on how Hesai Group is valued compared to its sales, our DCF model suggests there may be even deeper value to uncover. Could long-term cash flows tell a different story for the stock?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hesai Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Hesai Group Narrative

If you have a different perspective or prefer hands-on research, you can quickly explore the numbers and shape your own conclusion in just a few minutes. do it your way.

A great starting point for your Hesai Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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