We feel now is a pretty good time to analyse Hesai Group's (NASDAQ:HSAI) business as it appears the company may be on the cusp of a considerable accomplishment. Hesai Group, through with its subsidiaries, engages in the development, manufacture, and sale of three-dimensional light detection and ranging solutions (LiDAR). The US$516m market-cap company announced a latest loss of CN¥476m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Hesai Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Consensus from 7 of the American Auto Components analysts is that Hesai Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥132m in 2025. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 69%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Hesai Group's growth isn't the focus of this broad overview, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we'd like to point out is that The company has managed its capital prudently, with debt making up 10% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Hesai Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Hesai Group's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Hesai Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Hesai Group is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Hesai Group's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks 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.