US$7.15: That's What Analysts Think Hesai Group (NASDAQ:HSAI) Is Worth After Its Latest Results

Shareholders of Hesai Group (NASDAQ:HSAI) will be pleased this week, given that the stock price is up 13% to US$4.33 following its latest second-quarter results. The result was fairly weak overall, with revenues of CN¥459m being 3.0% less than what the analysts had been modelling. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Hesai Group

After the latest results, the eight analysts covering Hesai Group are now predicting revenues of CN¥2.24b in 2024. If met, this would reflect a substantial 23% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to CN¥2.12. Before this earnings announcement, the analysts had been modelling revenues of CN¥2.57b and losses of CN¥2.32 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 21% to US$7.15, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hesai Group, with the most bullish analyst valuing it at US$12.18 and the most bearish at US$5.30 per share. This is a very narrow spread of estimates, implying either that Hesai Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Hesai Group's rate of growth is expected to accelerate meaningfully, with the forecast 50% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 39% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hesai Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hesai Group going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Hesai Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.