Aswath Damodaran On Tesla's Valuation: Elon Musk Needs To Accomplish 'The Impossible'

One of the most contested stocks among bulls and bears is Tesla Inc TSLA.

According to a recent CNBC report, the bear side has its fair share of valid points, including a more than 40 percent gain in Tesla's stock this year along with an $887 million loss in the recent quarter.

Aswath Damodaran, a professor of finance at the New York University Stern School of Business and dubbed the "dean of valuation" by the Street, was a CNBC guest to offer his expert take.

According to Damodaran, there is no "slam dunk" case for either the bulls or bear to make. Damodaran's own view is that a price tag of $295 to $300 per share is "plausible," but only under certain conditions.

Musk Needs To Accomplish 'The Impossible;

Damodaran explained that Tesla CEO Elon Musk needs to accomplish "the impossible" moving forward to satisfy the bears. Specifically, he needs to grow Tesla's revenue to $100 billion within 10 years while simultaneously delivering acceptable margins to investors. The problem is Tesla is no ordinary automaker and as such it has a radically different expense profile.

"Ultimately, cars have to roll off the assembly line," he explained. "If what they have to spend to build those assembly lines is what a typical automobile company spends, there is no way they're worth $50 billion. They have to spend way too much to scale up to 100,000 cars, which is roughly where they are now. To a million-plus cars is where they need to be."

But if there is one CEO in Silicon Valley that could pull off "the impossible," it certainly is Musk who has already earned a reputation of "pulling off the impossible."

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