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Here's Why You Should Retain HSAI Stock in Your Portfolio
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Key Takeaways
Hesai Group is gaining lidar market share through new automotive and robotics design wins.
Revenues rose to $126.9 million in Q2 2026, with Q3 revenues projected at $162-$169 million.
HSAI's gross margin fell to 40.1% as lower-margin products weighed on profitability.
Hesai Group (HSAI - Free Report) , a developer, manufacturer and supplier of three-dimensional light detection and ranging solutions, is broadening its presence across automotive lidar, robotics, spatial intelligence and robotic actuation. The company is benefiting from new design wins and rising orders, driving strong revenue growth and further expansion anticipated in the third quarter. However, profitability remains under pressure as gross margin declines due to a higher contribution from lower-margin products.
Let’s dig deeper and see why this Zacks Rank #3 (Hold) stock is worth retaining in your portfolio.
Rising Market Share & Kosmo Initiative to Benefit HSAI
Hesai Group strengthened its position in the lidar market by expanding automotive and robotics adoption. The company collaborated with more than 50 embodied AI companies worldwide for its JT128 lidar and ranked No. 1 in China’s humanoid and quadruped robot lidar market, according to GGII.
HSAI also captured a 44% share of China’s long-range ADAS lidar market in June 2026, retaining the top position for the 17th consecutive month. It secured new design wins with Great Wall Motor, Li Auto, GAC Toyota and Volkswagen. Meanwhile, its Picasso 6D SPAD-SoC reached the SOP-ready stage, with Picasso-equipped ETX lidar undergoing customer validation and advancing toward RFI and RFQ discussions with global automakers and robotaxi operators.
Hesai Group is advancing its strategic growth initiatives through Kosmo and robotic actuation modules. Kosmo integrates AI spatial cameras, algorithms, 3D assets and cloud services to support spatial AI applications across robotics, entertainment and other industries. The company delivered initial prototypes in July 2026, secured orders from leading humanoid robotics firms, including Galbot, and engaged more than 200 prospective partners, with initial revenues expected in the third quarter.
The company is also expanding its robotic actuation business, offering modules with high torque and power density, compact designs and more than 95% transmission efficiency. Its modules are supplied to Sharpa. A dedicated production line has delivered more than 10,000 units, and shipments are expected to reach six-digit levels in 2027.
HSAI’s net revenues increased to $126.9 million in the second quarter of 2026 from $98.6 million in the same period of 2025, driven by a rise in deliveries of both ADAS and Robotics lidar products. For the third quarter of 2026, the company expects net revenues in the range of $162-$169 million, up from $111.7 million in the third quarter of 2025.
Shrinking Margin & Low ROE to Ail HSAI
HSAI’s gross margin declined to 40.1% in the second quarter of 2026 from 42.5% in the year-ago period. The year-over-year contraction primarily reflected a greater contribution from lower-margin products, which weighed on the company’s overall profitability. For full-year 2026, the company expects a gross margin close to 40%, down from 41.8% recorded in 2025.
The company’s return on equity of 5.5 is less than the industry’s 7.3. A low ROE suggests that the company may not be generating strong earnings relative to its equity base.
HSAI’s Price Performance, Valuation and Estimates
Hesai Group has underperformed the Zacks Automotive - Original Equipment industry in the last six months. Its shares have lost 30.7% against the industry’s growth of 5.3%.
Image Source: Zacks Investment Research
From a valuation perspective, HSAI appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 2.83, higher than the industry’s 2.21.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HSAI’s 2026 EPS has moved down 5 cents in the past 60 days, while for 2027, it has moved up by a penny in the last 30 days.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 7.2% and 25.7%, respectively. The EPS estimate for 2026 and 2027 has improved 9 cents and 8 cents, respectively, over the past 60 days.
The Zacks Consensus Estimate for CYD’s 2026 sales and earnings implies year-over-year growth of 58.6% and 68.6%, respectively.
View the Zacks #1 Rank List
Image: Bigstock
Here's Why You Should Retain HSAI Stock in Your Portfolio
Key Takeaways
Hesai Group (HSAI - Free Report) , a developer, manufacturer and supplier of three-dimensional light detection and ranging solutions, is broadening its presence across automotive lidar, robotics, spatial intelligence and robotic actuation. The company is benefiting from new design wins and rising orders, driving strong revenue growth and further expansion anticipated in the third quarter. However, profitability remains under pressure as gross margin declines due to a higher contribution from lower-margin products.
Let’s dig deeper and see why this Zacks Rank #3 (Hold) stock is worth retaining in your portfolio.
Rising Market Share & Kosmo Initiative to Benefit HSAI
Hesai Group strengthened its position in the lidar market by expanding automotive and robotics adoption. The company collaborated with more than 50 embodied AI companies worldwide for its JT128 lidar and ranked No. 1 in China’s humanoid and quadruped robot lidar market, according to GGII.
HSAI also captured a 44% share of China’s long-range ADAS lidar market in June 2026, retaining the top position for the 17th consecutive month. It secured new design wins with Great Wall Motor, Li Auto, GAC Toyota and Volkswagen. Meanwhile, its Picasso 6D SPAD-SoC reached the SOP-ready stage, with Picasso-equipped ETX lidar undergoing customer validation and advancing toward RFI and RFQ discussions with global automakers and robotaxi operators.
Hesai Group is advancing its strategic growth initiatives through Kosmo and robotic actuation modules. Kosmo integrates AI spatial cameras, algorithms, 3D assets and cloud services to support spatial AI applications across robotics, entertainment and other industries. The company delivered initial prototypes in July 2026, secured orders from leading humanoid robotics firms, including Galbot, and engaged more than 200 prospective partners, with initial revenues expected in the third quarter.
The company is also expanding its robotic actuation business, offering modules with high torque and power density, compact designs and more than 95% transmission efficiency. Its modules are supplied to Sharpa. A dedicated production line has delivered more than 10,000 units, and shipments are expected to reach six-digit levels in 2027.
HSAI’s net revenues increased to $126.9 million in the second quarter of 2026 from $98.6 million in the same period of 2025, driven by a rise in deliveries of both ADAS and Robotics lidar products. For the third quarter of 2026, the company expects net revenues in the range of $162-$169 million, up from $111.7 million in the third quarter of 2025.
Shrinking Margin & Low ROE to Ail HSAI
HSAI’s gross margin declined to 40.1% in the second quarter of 2026 from 42.5% in the year-ago period. The year-over-year contraction primarily reflected a greater contribution from lower-margin products, which weighed on the company’s overall profitability. For full-year 2026, the company expects a gross margin close to 40%, down from 41.8% recorded in 2025.
The company’s return on equity of 5.5 is less than the industry’s 7.3. A low ROE suggests that the company may not be generating strong earnings relative to its equity base.
HSAI’s Price Performance, Valuation and Estimates
Hesai Group has underperformed the Zacks Automotive - Original Equipment industry in the last six months. Its shares have lost 30.7% against the industry’s growth of 5.3%.
Image Source: Zacks Investment Research
From a valuation perspective, HSAI appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 2.83, higher than the industry’s 2.21.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HSAI’s 2026 EPS has moved down 5 cents in the past 60 days, while for 2027, it has moved up by a penny in the last 30 days.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the auto space are Garrett Motion Inc. (GTX - Free Report) and China Yuchai International Limited (CYD - Free Report) . While GTX sports a Zacks Rank #1 (Strong Buy), CYD has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 7.2% and 25.7%, respectively. The EPS estimate for 2026 and 2027 has improved 9 cents and 8 cents, respectively, over the past 60 days.
The Zacks Consensus Estimate for CYD’s 2026 sales and earnings implies year-over-year growth of 58.6% and 68.6%, respectively.