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 quarterly results. The result was fairly weak overall, with revenues of CN¥459m being 3.0% less than what the analysts had been modelling. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Hesai Group's eight analysts is for revenues of CN¥2.24b in 2024. This would reflect a major 23% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 42% to CN¥2.12. Before this latest report, the consensus had been expecting revenues of CN¥2.57b and CN¥2.32 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The analysts have cut their price target 21% to US$7.15per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Hesai Group at US$12.18 per share, while the most bearish prices it at US$5.30. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business 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 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. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% annually. 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. They also downgraded Hesai Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. 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.
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. We have forecasts for Hesai Group going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Hesai Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.