Analyzing QuantumScape (NYSE:QS) and Hesai Group (NASDAQ:HSAI)

QuantumScape (NYSE:QS) and Hesai Group (NASDAQ:HSAI) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and target prices for QuantumScape and Hesai Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QuantumScape	4	7	0	0	1.64
Hesai Group	0	1	6	2	3.11

QuantumScape currently has a consensus price target of $9.17, indicating a potential downside of 16.06%. Hesai Group has a consensus price target of $30.80, indicating a potential upside of 36.77%. Given Hesai Group’s stronger consensus rating and higher possible upside, analysts plainly believe Hesai Group is more favorable than QuantumScape.

Valuation and Earnings

This table compares QuantumScape and Hesai Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QuantumScape	N/A	N/A	-$477.86 million	($0.81)	-13.48
Hesai Group	$284.57 million	10.38	-$14.02 million	$0.42	53.62

Hesai Group has higher revenue and earnings than QuantumScape. QuantumScape is trading at a lower price-to-earnings ratio than Hesai Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares QuantumScape and Hesai Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QuantumScape	N/A	-39.90%	-35.31%
Hesai Group	15.70%	8.04%	5.94%

Institutional and Insider Ownership

29.9% of QuantumScape shares are held by institutional investors. Comparatively, 48.5% of Hesai Group shares are held by institutional investors. 5.5% of QuantumScape shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

QuantumScape has a beta of 2.76, meaning that its stock price is 176% more volatile than the S&P 500. Comparatively, Hesai Group has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Summary

Hesai Group beats QuantumScape on 12 of the 14 factors compared between the two stocks.

About QuantumScape

QuantumScape Corporation, a research and development stage company, focuses on the development and commercialization of solid-state lithium-metal batteries for electric vehicles and other applications. The company was founded in 2010 and is headquartered in San Jose, California.

About Hesai Group

Hesai Group, through with its subsidiaries, engages in the development, manufacture, and sale of three-dimensional light detection and ranging solutions (LiDAR). Its LiDAR products are used in passenger and commercial vehicles with advanced driver assistance systems; autonomous passenger and freight mobility services; and other applications, such as delivery robots, street sweeping robots, and logistics robots in restricted areas. Hesai Group was founded in 2014 and is based in Shanghai, China.