Hesai Group stock closed up 3.9% at US$17.77 on Wednesday, even though the shares are still down over the past week and past quarter. The market is reacting to one thing above all in this earnings print. Q2 marked a cleanly profitable quarter built on lidar revenue of about RMB 861m and a net margin that now sits in the mid teens over the past year.

For short term traders that move looks decisive. For anyone thinking over a multi year horizon, the real story is the profit profile behind that 37.6x trailing P/E and how durable this lidar cash engine proves to be.

Is Hesai Group stock genuinely cheap at a 37.6x P/E against peers, or are those earnings, including a CN¥190.7m one off gain, giving a distorted picture? Compare its current market price to a detailed intrinsic value view in the valuation analysis for Hesai Group.

Q2 2026 Earnings Summary

• Revenue (Q2 2026 vs. Q2 2025): CN¥860.8m vs. CN¥706.4m (up about 22%)
• Net Income (Excl. Extra Items, Q2 2026 vs. Q2 2025): CN¥70.6m vs. CN¥44.1m (up about 60%)
• Basic EPS (Q2 2026 vs. Q2 2025): CN¥0.45 vs. CN¥0.33 (higher year on year)
• Gross Margin (Q2 2026): Around 40% on consolidated revenue, reflecting the profitability profile of Hesai Group’s lidar operations and growth initiatives

Prefer clean charts instead of another wall of earnings tables and footnotes? See Hesai Group’s profit profile and valuation story laid out visually in the full company report for Hesai Group.

Hesai Group: Bullish Case Faces Real-World Checkpoints

The optimistic view on Hesai Group says a leading lidar supplier can turn shipment growth into a durable, high margin platform across autos and robotics. Q2 gives some concrete proof points. Lidar units above 628,000 with roughly 80% year on year growth show the volume ramp that this thesis relies on, and gross margin around 40% suggests scale efficiency is starting to hold in the income statement, not just in presentations.

The narrative also leans on diversification and a second growth engine. Robotics lidar shipments above 142,000 and the first RMB 45m from Strategic Growth Initiatives show that non automotive and non lidar revenue is moving from slideware into audited numbers, even if SGI still runs at an operating loss. Raised SGI revenue guidance and reiterated lidar shipment targets signal that management is tying its story to measurable unit and revenue milestones.

Compare that volume ramp and margin profile with how the Street is resetting its expectations for Hesai Group. See the consensus price target analysis for Hesai Group

Hesai Bear Case: Margins Hold, Capital Intensity Bites

The bearish view on Hesai Group centers on two linked worries: hardware lidar becoming a low margin commodity, and the cost of building a broader platform eating into profits. Q2 does not show the feared margin collapse. Gross margin around 40% and an RMB 66m operating profit in lidar suggest pricing and cost control are holding up for now.

The stress point sits in the new growth layers. SGI booked RMB 45m of revenue but carried an RMB 64m operating loss. That confirms the concern that new products require heavy upfront spend before they earn their keep. Bears also worry about execution risk in program ramps and international expansion. Management talks about six digit actuation volumes in 2027 and rising overseas demand. Q2 does not yet supply hard, large scale revenue milestones to offset those execution and geopolitical risks.

After SGI losses and one-off earnings, are these early warning signs isolated or structural? Review our risk analysis for Hesai Group which shows 2 important warning signs

Take Control Of Your Next Move

If Hesai Group’s profitable Q2 and 37.6x P/E have caught your attention, register free with Simply Wall St and add it to a Watchlist to track its share price against fair value and watch how margins and earnings develop over time. When you decide to build or adjust a position, use the Portfolio Command Center to cut through market noise and focus on the key updates that matter for your holdings. For the longer term, tap into crowd insights through the Community and see how other investors are interpreting the same numbers and risks. By spotting hidden catalysts and potential warning signs early, you give yourself a better chance of staying ahead of the market.

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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.