Hesai Group (HSAI) is back in focus after announcing a new design win exceeding 1 million lidar units with a top tier European automaker, alongside recent profitability and revenue guidance pointing to higher second quarter sales.

Despite the new design win and recent earnings guidance, Hesai Group’s share price has been under pressure, with the stock down 24.29% on a 90 day share price return and 14.33% year to date, while the 3 year total shareholder return of 173.25% still reflects a very strong longer term payoff profile.

If lidar growth stories interest you, it may also be worth seeing what else is moving in related areas by checking out 35 robotics and automation stocks

With shares down in recent months despite design wins, profitability, and revenue guidance, the key question for you is whether Hesai’s current price reflects a discount to its fundamentals or whether the market is already pricing in future growth.

Most Popular Narrative: 23.8% Undervalued

According to the most followed narrative on Hesai Group, a fair value of $27.07 sits well above the last close at $20.63, which frames the current debate around how durable its execution can be.

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. This combination is critical, as it signals that growth is not coming at the expense of profitability, but is instead aligned with improving unit economics.

Want to understand what is sitting behind that fair value gap? The narrative leans heavily on rapid unit volume growth, rising margins, and a richer earnings profile than the headline multiples suggest.

Result: Fair Value of $27.07 (UNDERVALUED)

However, this depends on lidar adoption staying on track, as well as Hesai managing geopolitical pressures and customer concentration that could quickly change sentiment.

Another View: Higher P/E Points To Richer Pricing

There is a different message if you look at the simple earnings multiple. Hesai trades on a P/E of 46.4x compared with 19.9x for the US Auto Components industry and 16.8x for peers, and even above an estimated fair ratio of 40x. That gap suggests more valuation risk if expectations slip.

Next Steps

With mixed signals across valuation, growth and sentiment, the real question is how you weigh the upside against the concerns. Move quickly, review the underlying data, and decide where you stand after weighing 4 key rewards and 2 important warning signs

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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.