Hesai Group (HSAI) Had Two Stories. Only One Could Carry It

Hesai Group’s past year has been packed with headlines, from Q2 2026 profit growth to high profile lidar deals with Mercedes Benz and Volkswagen and a splashy 8 for 1 stock split. Investors who held Hesai Group over the past year are down 42.3%, including dividends. If you had bought on 1 October 2025, seeing bulls and bears argue over future margins and unit volumes, how would you now judge the risk in Hesai’s lidar and Physical AI push?

Hesai Group is not the only name tied to this theme. Zero in on 90 robotics and automation stocks and compare how each one is priced.

The Two Hesai Group Stories Investors Were Weighing

The shares cost US$27.59 at the start, with bulls and bears arguing over what Hesai Group’s lidar and Physical AI ambitions could realistically support.

The bullish narrative pointed to a Fair Value of US$35.88, the price implied if optimistic assumptions played out, backed by revenue growth of 53.2% a year and profit margins rising toward 20.0%.

The bearish script saw Fair Value at US$24.03, based on 38.2% annual revenue growth and concern that cheaper rival sensors and alternative technologies would cap lidar adoption and margins.

What The Results Put To The Test For Hesai Group

Hesai Group landed major lidar supply deals with Mercedes Benz and Volkswagen, while Q2 2026 numbers showed revenue at ¥860.8m and net income at ¥70.55m with net margin at 8.2%. That combination supported the optimistic case on growth and scale, yet pricing pressure and still moderate profitability kept the cautious script alive. The evidence cut both ways.

The key assumption investors can focus on is margin lift. For any automation or sensor stock, it may be useful to track whether net margin actually climbs toward the stated target or stalls while revenue rises.

What Hesai Group’s Lower Price Now Asks You To Believe

Hesai Group’s shares now trade at US$15.93. The selected Narrative’s Fair Value sits above the current price and frames that gap around execution at scale, not just lidar hype.

The Narrative leans on Hesai’s push into Physical AI and volume shipment momentum. For that figure to be reached, future buyers would need to see multi segment demand stay strong enough for rising unit volumes to support durable profitability.

"Something quietly shifted in the lidar space and most investors haven’t fully processed it yet. For years, lidar companies were grouped into the same bucket: high promise, heavy losses, uncertain adoption."

The price and this Narrative do not agree. → Uncover what this Narrative says Hesai Group is actually worth

Another Piece In The Automation Stack

Hesai Group is chasing Physical AI hardware. Consider who keeps those machines productive.

Automation only delivers when it runs reliably for years. That depends on vehicles, fleets and equipment staying connected, updated and properly serviced.

One large manufacturer is pushing deeper into software subscriptions and telematics tools. Its systems let business customers monitor assets, plan maintenance and manage charging.

Those services can increase customer reliance and support more high margin service work. If that model scales, selling hardware could be only the opening move.

That argument has a Narrative and a number behind it. → See the company one Narrative values 31% above its price

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.

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