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Assessing Hesai Group (NasdaqGS:HSAI) Valuation After Exclusive Robotaxi Supply Deal and Tech Showcase

Simply Wall St · 09/17/2025 19:31

Thinking about what to do with Hesai Group (NasdaqGS:HSAI) after the latest headlines? Investors have plenty to consider after the company revealed it is expanding its production agreement as the exclusive lidar supplier for a leading U.S.-based robotaxi company, with the partnership now valued at over $40 million. This move cements Hesai’s role at the center of the next generation of autonomous fleets, thanks in part to its technical advantages in both long- and short-range lidar. The announcement comes as the robotaxi market enters an intense growth phase, raising the stakes for the players involved and stirring up new questions about Hesai’s position in the industry.

This deal lands amid a streak of growth-oriented developments. Hesai’s quick succession of product launches and its high-profile showcase at Munich’s IAA Mobility 2025 confirm that innovation remains a central focus. For those following the stock, momentum has been hard to miss. Shares are up 16% over the past month and have soared 63% in the past three months, with a steady advance over the past year. This positive momentum coincides with a wave of new customer wins and technological milestones, signaling a fresh round of investor enthusiasm around its role in powering autonomous vehicles.

With the stock’s strong performance and a high-profile new deal, is Hesai Group set for further upside, or is all the optimism already reflected in the price? Could now be the time to look closer at its valuation story?

Most Popular Narrative: 4.6% Overvalued

The current market narrative suggests Hesai Group is trading above its estimated fair value, with recent price targets reflecting heightened optimism around earnings, LiDAR adoption, and overseas expansion potential.

The projection of 2025 LiDAR shipments reaching 1.2 million to 1.5 million units, with nearly 200,000 high-margin robotic LiDAR units, is expected to significantly boost revenue. Anticipated net revenues of RMB 3 billion to RMB 3.5 billion for 2025, driven by strong demand and mass market adoption, indicate potential growth in revenue.

Curious how bold growth estimates and rising international momentum create a premium valuation for Hesai Group? There is a crucial set of financial assumptions underpinning this upbeat outlook. What ambitious numbers are driving analysts to see value where others might see risk? The answer lies in the engine room of future revenues, profits, and multiples. Discover what fuels this forecast.

Result: Fair Value of $28.49 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued heavy reliance on a few core clients and the potential for margin pressure from aggressive pricing remain key risks to monitor closely.

Find out about the key risks to this Hesai Group narrative.

Another View: DCF Model Offers a Different Take

While the market’s optimism has set a premium price based on growth estimates, our SWS DCF model actually suggests a different valuation story for Hesai Group. Could the fundamentals be at odds with market sentiment?

Look into how the SWS DCF model arrives at its fair value.

HSAI Discounted Cash Flow as at Sep 2025
HSAI Discounted Cash Flow as at Sep 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hesai Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Hesai Group Narrative

If you see things differently or want to dig into the details yourself, you can build your own view of Hesai Group’s story in just a few minutes using Do it your way.

A great starting point for your Hesai Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.