Investing.com -- Tesla’s sky-high market valuation remains difficult to justify and may become even harder to defend in the near term, 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.

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

Morgan Stanley pointed out that most investors value Tesla’s core auto business at just $50 to $100 per share—far 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 highlights Tesla’s potential in several areas 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. They believe Tesla’s installed base of vehicles could reach 50 million units by the mid-2030s.

Energy storage is described as the company’s “fastest growing and highest margin hardware business,” with an estimated value of $67 per share, excluding future recurring revenue potential.

Still, analysts caution that Tesla’s valuation largely hinges on “businesses that have either poor disclosure, no disclosure, or that have yet to be launched into the commercial market.”

They argue this model poses challenges for public investors more accustomed 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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