Contrasting Regal Rexnord (NYSE:RRX) and Hesai Group (NASDAQ:HSAI)

Regal Rexnord (NYSE:RRX) and Hesai Group (NASDAQ:HSAI) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Regal Rexnord	-0.48%	9.42%	3.86%
Hesai Group	-25.68%	-9.83%	-7.10%

Institutional & Insider Ownership

99.7% of Regal Rexnord shares are owned by institutional investors. Comparatively, 48.5% of Hesai Group shares are owned by institutional investors. 0.8% of Regal Rexnord shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Regal Rexnord has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Hesai Group has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Valuation and Earnings

This table compares Regal Rexnord and Hesai Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regal Rexnord	$6.25 billion	1.61	-$57.40 million	($0.48)	-314.58
Hesai Group	$264.37 million	2.07	-$67.04 million	($0.51)	-8.43

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

Analyst Ratings

This is a summary of current recommendations for Regal Rexnord and Hesai Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regal Rexnord	0	1	5	0	2.83
Hesai Group	0	1	2	0	2.67

Regal Rexnord currently has a consensus target price of $188.00, suggesting a potential upside of 24.50%. Given Regal Rexnord’s stronger consensus rating and higher possible upside, research analysts clearly believe Regal Rexnord is more favorable than Hesai Group.

Summary

Regal Rexnord beats Hesai Group on 11 of the 14 factors compared between the two stocks.

About Regal Rexnord

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.

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.