Tesla’s high market valuation remains difficult to justify and may become even harder to defend soon, according to Morgan Stanley analysts.

“Nearly 15 years after going public, investors struggle to justify the value of Tesla (NASDAQ:TSLA) as much as ever before,” the analysts wrote in a note to clients on Monday.

“We expect this valuation ‘problem’ gets worse before it gets better,” they added.

Morgan Stanley noted most investors value Tesla’s core auto business at just $50 to $100 per share—well below its current stock price.

“Then they put their pens down. Excel spreadsheet closed,” the firm said. “Stopping here is akin to valuing Amazon (NASDAQ:AMZN) solely as an online retailer or Apple (NASDAQ:AAPL) as a seller of glowing rectangles and earbuds.”

The firm emphasized Tesla’s potential beyond cars, including autonomy, energy storage, and humanoid robots. Morgan Stanley estimates that each $100 in monthly revenue per vehicle could be worth $80 to $100 per share, with the installed base possibly reaching 50 million vehicles by the mid-2030s.

Energy storage is described as Tesla’s “fastest growing and highest margin hardware business,” valued at an estimated $67 per share, excluding future recurring revenue.

However, analysts caution Tesla’s valuation depends heavily on “businesses that have either poor disclosure, no disclosure, or that have yet to be launched into the commercial market.” This makes it challenging for public investors used to valuing proven earnings and cash flow.

“Our $800 bull case for the stock would require, in our opinion, at least $20 of EPS,” they said. Tesla currently earns closer to $2 per share. “Ultimately, investors will need to see earnings and cash flow.”

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