Hesai Group (HSAI) is in focus after shareholders approved an 8-for-1 stock split at the June annual meeting, effective July 10, 2026, along with updates on its lidar role with Mercedes-Benz.

The stock split and Mercedes-Benz lidar partnership arrive after a mixed run for Hesai Group, with the share price down 15.6% over 30 days and 34.2% year to date. However, a 3 year total shareholder return of 34.1% points to earlier momentum that has since cooled.

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Hesai Group now couples a sizeable lidar business, growing revenue and net income with a stock that has recently fallen hard even after the split and Mercedes-Benz news. Does that set up a fair price or a value trap?

Most Popular Narrative: 41.4% Undervalued

Hesai Group's most followed valuation narrative places fair value at $27.07, well above the last close at $15.85. This sets up a wide pricing gap to unpack.

Hesai’s valuation is increasingly supported by tangible execution and forward visibility rather than expectations alone. Following strong 4Q25 results, management reiterated a confident outlook, underpinned by stable gross margins driven by scale efficiencies and ongoing technology-led cost reductions.

Want to see what is behind that valuation gap? The narrative leans heavily on rapid lidar volume expansion, rising profitability, and new product lines that reshape long term revenue mix.

Result: Fair Value of $27.07 (UNDERVALUED)

However, Hesai Group’s story could still be knocked off course by geopolitical pressure on China-based suppliers or slower than expected lidar adoption by global automakers.

Another View: Hesai Group Through the P/E Lens

Multiples tell a different story about Hesai Group. The stock trades on a P/E of 35.6x, well above the US Auto Components industry at 20.6x and a peer average of 15.5x, while sitting close to an estimated fair ratio of 37.4x.

That gap means investors are already paying a premium versus sector and peer benchmarks, even if the ratio is near the fair ratio level that our models suggest the market could move towards. Is that premium a reasonable price for Hesai Group’s growth profile, or a sign that expectations are already stretched?

Next Steps

With sentiment on Hesai Group clearly split between risks and rewards, this is a good time to look through the underlying data yourself and move quickly to form your own view. You can start with 4 key rewards and 2 important warning signs

Looking for more investment ideas beyond Hesai Group?

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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.