The Hesai Group (NASDAQ:HSAI) First-Quarter Results Are Out And Analysts Have Published New Forecasts

Shareholders might have noticed that Hesai Group (NASDAQ:HSAI) filed its quarterly result this time last week. The early response was not positive, with shares down 4.5% to US$7.98 in the past week. The results were positive, with revenue coming in at CN¥430m, beating analyst expectations by 6.8%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Hesai Group

After the latest results, the five analysts covering Hesai Group are now predicting revenues of CN¥1.75b in 2023. If met, this would reflect a substantial 27% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 45% to CN¥3.50. Before this latest report, the consensus had been expecting revenues of CN¥1.80b and CN¥2.73 per share in losses. While this year's revenue estimates dropped there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target was broadly unchanged at US$28.81, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Hesai Group, with the most bullish analyst valuing it at US$38.96 and the most bearish at US$24.97 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Hesai Group's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 37% growth on an annualised basis. This is compared to a historical growth rate of 66% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. Even after the forecast slowdown in growth, it seems obvious that Hesai Group is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Hesai Group. They also downgraded their revenue estimates, although industry data suggests that Hesai Group's revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$28.81, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Hesai Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Hesai Group going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - Hesai Group has 1 warning sign we think you should be aware of.

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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.