A Roth Capital analyst says Tesla’s stock is worth $150 — which would be a 78% discount

Tesla’s stock is overvalued and worth only $150, according to Craig Irwin, senior research analyst at Roth Capital, who said the electric carmaker must do more to justify its share price of nearly $700.

Shares of Tesla closed at $691.05 overnight as investors cheered the electric carmaker’s forecast-beating deliveries.

But the possibility of Tesla beating estimates is “clearly already in valuation,” Irwin told CNBC’s “Squawk Box Asia” on Tuesday. The company’s valuation of around $660 billion is close to the total size of the U.S. and European automotive markets, even though it’s only a “minor player” overall, said the analyst.

“So for me, I see this as a market dislocation, I see this as something avoiding analysis of the fundamentals and I think there’s room for many successful companies in the market. People are just assuming that Tesla has no competition when they put this kind of lofty valuation on the company,” Irwin said.

Still, Irwin said he’s bullish on the outlook for the sales of electric vehicles, in which Tesla is a market leader.

Tesla on Friday reported that it delivered 184,800 vehicles and produced 180,338 cars in the first quarter of 2021. Analysts were expecting the company to deliver around 168,000 vehicles during this period, according to estimates compiled by FactSet as of April 1.

The company’s shares jumped as much as 7% on Monday.

Irwin said there are “good things going on” for Tesla. He cited an expected entry into India and prospects in China as factors helping Tesla’s outlook.

But the company needs to do much more to justify its current stock price of nearly $700, said Irwin.

“They would really need to deliver on the robotaxis, the fully autonomous vehicles,” the analyst said, adding that Tesla appeared to pull back its efforts in that area, while other companies are coming out with “vastly superior technology.”

— CNBC’s Lora Kolodny and Katrina Bishop contributed to this report.