Hesai Group (NASDAQ:HSAI): Is Breakeven Near?

Hesai Group (NASDAQ:HSAI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hesai Group, through with its subsidiaries, engages in the development, manufacture, and sale of three-dimensional light detection and ranging solutions (LiDAR) in Mainland China, Europe, North America, and internationally. The US$538m market-cap company’s loss lessened since it announced a CN¥476m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥464m, as it approaches breakeven. As path to profitability is the topic on Hesai Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Hesai Group

Consensus from 8 of the American Auto Components analysts is that Hesai Group is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CN¥101m in 2025. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 71% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Hesai Group's upcoming projects, but, bear in mind 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 13% 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 key fundamentals of Hesai Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Hesai Group, take a look at Hesai Group's company page on Simply Wall St. We've also compiled a list of important 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com