Hesai Group (NASDAQ:HSAI) and Arrow Electronics (NYSE:ARW) Financial Review

Arrow Electronics (NYSE:ARW) and Hesai Group (NASDAQ:HSAI) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Institutional and Insider Ownership

99.3% of Arrow Electronics shares are held by institutional investors. Comparatively, 48.5% of Hesai Group shares are held by institutional investors. 0.8% of Arrow Electronics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Arrow Electronics and Hesai Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Electronics	1	1	3	1	2.67
Hesai Group	0	1	2	1	3.00

Arrow Electronics currently has a consensus target price of $233.25, suggesting a potential upside of 0.48%. Hesai Group has a consensus target price of $23.50, suggesting a potential upside of 62.52%. Given Hesai Group’s stronger consensus rating and higher possible upside, analysts clearly believe Hesai Group is more favorable than Arrow Electronics.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Electronics	$30.85 billion	0.38	$571.27 million	$15.65	14.83
Hesai Group	$432.94 million	4.68	$62.33 million	$0.41	35.27

Arrow Electronics has higher revenue and earnings than Hesai Group. Arrow Electronics 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 Arrow Electronics and Hesai Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arrow Electronics	2.26%	13.41%	2.83%
Hesai Group	14.77%	5.52%	4.47%

Risk & Volatility

Arrow Electronics has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Hesai Group has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

About Arrow Electronics

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes electronic components comprising semiconductor products and related services; interconnect, passive, and electromechanical products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment also provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

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.