He maintained his share-price target at $900. Tesla shares recently traded at $1,545.73, up 0.4%. The stock has soared 269% year to date, while the Nasdaq has climbed 17%.
“Let us be clear: this is a valuation call,” Sacconaghi wrote in a commentary cited by Bloomberg, calling it “mind-boggling.”
Tesla’s forward price-earnings ratio totals 233, according to Morningstar, and its price-to-cash-flow ratio totals 108.
For a recap of Tesla's latest earnings report please click here.
Potential risks for Tesla include the possibility that sales of new Tesla models will cannibalize older ones and increased competition in the electric vehicle market, Sacconaghi said.
The stock’s 481% surge in gain in the past year encompasses more rosy news than is likely, he said.
Sacconaghi emphasized that he’s not trying to make a short-term call on Tesla. That would be a “fool’s game,” he said
“Expectations appear achievable/beatable, the forthcoming Battery Day could be noteworthy, and there is strong price momentum in both Tesla and among growth stocks more broadly,” the analyst said.
Last week, Tesla CEO Elon Musk said it’s building a new factory in Austin, Texas. He described the future factory as an "ecological paradise" and said it will be open to the public. Construction of the facility is already in progress, he said.
The Texas site is initially intended to build Model 3 and Model Y vehicles for the eastern half of the U.S.
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