Tesla’s stock has been entertaining to watch over the last few weeks.

It has analysts shaking their heads, wondering why the stock is soaring.

Morgan Stanley’s Adam Jones may have put it best in a recent interview with Business Insider: “We’re struggling to play catch-up here with the valuation.”

Tesla Inc.’s (Nasdaq: TSLA) stock suffered just like every other company during the coronavirus crash in February. It hit a recent low of $361.22 on March 18.

Since then Tesla’s stock has rocketed over 300% to trade above $1,400 per share. It even rose to $1,764.06 at one point during trading Monday. Check out it’s year-to-date movement in the chart below.

Tesla Has Rocketed Off March Lows

Tesla stock

But is this run up for Tesla stock sustainable?

As you can see from the chart above, it hasn’t been a smooth ride. Shares swing up and down on any news about the company. Tesla is a popular stock among young day traders looking for quick profits, which make these moves even more volatile.

Tesla stock was down more than 3% Thursday after a couple of events:

  1. Tesla vehicle registrations were down 48% in California for the second quarter. Fewer than 10,000 new vehicles were registered, according to Cross-Sell data. That’s not great considering the Golden State accounts for around 40% of Tesla’s sales in the U.S.
  2. Citigroup analyst Itay Michaeli changed the firm’s price target from $246 to $450 per share Thursday. But that is still around 70% lower than where the stock sits right now. If the stock falls that far, anyone who invests $1,000 in Tesla today would lose $700.

Where Tesla Stock May Go

Tesla is a hot company, and an even hotter stock.

But when comparing it to other companies within the auto industry, you can see a sharp disconnect.

Here’s a look at Tesla stock market valuation compared to other American automakers, courtesy of Business Insider:

Tesla stock valuation

What’s wild is that Tesla delivered 367,656 cars in the 2019 compared to Ford Motor Co.’s (NYSE: F) 5.4 million! That’s $200,000 per car for Tesla, and only $6,700 per vehicle for Ford.

The numbers don’t line up.

Banyan Hill Publishing Chartered Market Technician Chad Shoop warns that Tesla is not a stock that trades on fundamentals.

“Yes, it sells a great car,” said Shoop, Editor of Quick Hit Profits. “But even if Tesla sold a car to everyone in the U.S., this valuation is still high. I’m exaggerating, but the point is this is not a stock that trades on valuations, registrations or production capacity.”

Because of that, Shoop thinks it would be prudent to take some profits off the table right now.

“I don’t see it being higher than where it is today a year from now, or even five years from now,” Shoop added.

Tesla has become a market darling, but watch the numbers to see if its actual production can keep up with where the market has taken it today.