Hesai Group (NASDAQ:HSAI) versus OPENLANE (NYSE:KAR) Critical Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OPENLANE	9.00%	12.42%	3.65%
Hesai Group	15.70%	8.04%	5.94%

Analyst Ratings

This is a summary of recent ratings and price targets for OPENLANE and Hesai Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OPENLANE	0	2	4	1	2.86
Hesai Group	0	1	5	2	3.13

OPENLANE presently has a consensus price target of $30.20, suggesting a potential downside of 2.20%. Hesai Group has a consensus price target of $30.80, suggesting a potential upside of 7.73%. Given Hesai Group’s stronger consensus rating and higher probable upside, analysts plainly believe Hesai Group is more favorable than OPENLANE.

Insider & Institutional Ownership

99.8% of OPENLANE shares are held by institutional investors. Comparatively, 48.5% of Hesai Group shares are held by institutional investors. 1.5% of OPENLANE shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares OPENLANE 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
OPENLANE	$1.79 billion	1.83	$109.90 million	$0.87	35.49
Hesai Group	$284.57 million	13.18	-$14.02 million	$0.42	68.07

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

Risk & Volatility

OPENLANE has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Hesai Group has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Summary

Hesai Group beats OPENLANE on 8 of the 15 factors compared between the two stocks.

About OPENLANE

OPENLANE, Inc., together with its subsidiaries, operates as a digital marketplace for used vehicles, which connects sellers and buyers in North America, Europe, the Philippines, and Uruguay. The company operates through two segments, Marketplace and Finance. The Marketplace segment offers digital marketplace services for buying and selling used vehicles. Its digital marketplaces include OPENLANE, a mobile-app enabled solutions that allows dealers to sell and source inventory in the United States. This segment also provides value-added ancillary services, including inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, titling, administrative, and collateral recovery services. This segment sells its products and services through vehicle manufacturers, fleet companies, rental car companies, finance companies, and others. The Finance segment offers floorplan financing, a short-term inventory-secured financing to independent used vehicle dealers. The company serves commercial customers and dealer customers. The company was formerly known as KAR Auction Services, Inc. and changed its name to OPENLANE, Inc. in May 2023. OPENLANE, Inc. was incorporated in 2006 and is headquartered in Carmel, Indiana.

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.