There's been a notable change in appetite for Hesai Group (NASDAQ:HSAI) shares in the week since its quarterly report, with the stock down 15% to US$4.53.       The results were positive, with revenue coming in at CN¥359m, beating analyst expectations by 6.5%.     The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of.  So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

NasdaqGS:HSAI Earnings and Revenue Growth May 22nd 2024

Taking into account the latest results, the consensus forecast from Hesai Group's eight analysts is for revenues of CN¥2.80b in 2024. This reflects a huge 55% improvement in revenue compared to the last 12 months.      Losses are predicted to fall substantially, shrinking 38% to CN¥2.26.       Before this earnings announcement, the analysts had been modelling revenues of CN¥2.95b and losses of CN¥1.75 per share in 2024.         So it's pretty clear the analysts have mixed opinions on Hesai Group after this update; revenues were downgraded and per-share losses expected to increase.    

The average price target was broadly unchanged at US$10.99, 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.   The most optimistic Hesai Group analyst has a price target of US$16.14 per share, while the most pessimistic values it at US$6.00.   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.    

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Hesai Group's rate of growth is expected to accelerate meaningfully, with the forecast 79% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 44% p.a. over the past three years.    Compare this with other companies in the same industry, which are forecast to grow their revenue 11% 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 increased 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.       The consensus price target held steady at US$10.99, 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 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Hesai Group that you need to be mindful 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.