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. Revenues were CN¥459m, with Hesai Group reporting some 3.0% below analyst expectations. 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. 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

Following the latest results, Hesai Group's eight analysts are now forecasting revenues of CN¥2.24b in 2024. This would be a sizeable 23% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 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. 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 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. 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. Currently, the most bullish analyst values Hesai Group at US$12.18 per share, while the most bearish prices it at US$5.30. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Hesai Group's growth to accelerate, with the forecast 50% annualised growth to the end of 2024 ranking favourably alongside historical growth of 39% per annum 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. Even so, earnings per share are more important to the intrinsic 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..

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.