Head to Head Analysis: Custom Truck One Source (NYSE:CTOS) vs. Hesai Group (NASDAQ:HSAI)

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

Profitability

This table compares Custom Truck One Source and Hesai Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	-0.88%	-2.18%	-0.49%
Hesai Group	14.75%	6.03%	4.77%

Institutional and Insider Ownership

90.1% of Custom Truck One Source shares are owned by institutional investors. Comparatively, 48.5% of Hesai Group shares are owned by institutional investors. 4.7% of Custom Truck One Source shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Custom Truck One Source has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Hesai Group has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Valuation & Earnings

This table compares Custom Truck One Source and Hesai Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.94 billion	1.23	-$31.05 million	($0.09)	-117.39
Hesai Group	$432.94 million	6.07	$62.33 million	$0.44	42.66

Hesai Group has lower revenue, but higher earnings than Custom Truck One Source. Custom Truck One Source 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 Recommendations

This is a summary of current ratings for Custom Truck One Source and Hesai Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	2	1	4	0	2.29
Hesai Group	0	1	5	1	3.00

Custom Truck One Source presently has a consensus target price of $10.14, suggesting a potential downside of 4.00%. Hesai Group has a consensus target price of $30.13, suggesting a potential upside of 60.50%. Given Hesai Group’s stronger consensus rating and higher possible upside, analysts clearly believe Hesai Group is more favorable than Custom Truck One Source.

Summary

Hesai Group beats Custom Truck One Source on 11 of the 15 factors compared between the two stocks.

About Custom Truck One Source

Custom Truck One Source, Inc. provides specialty equipment rental and sale services to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other infrastructure-related industries in the United States and Canada. The company operates through three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The ERS segment owns new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks, and other machinery and equipment. The TES segment offers new equipment for sale to be used for end-markets, which can be modified to meet customers specific needs. The APS segment provides truck and equipment maintenance and repair services; and rents and sells specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, as well as sale of specialized aftermarket parts. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is headquartered in Kansas City, Missouri.

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.