CNBC's Michael Farr Believes Tesla Stock Is 'Stupidly Expensive'

CNBC contributor Michael Farr says Tesla stock is “stupidly expensive.”

What Happened: Farr says Tesla stock is “an example of disparity” and its future is unclear: “It may go higher and shareholders may be rewarded, or it may languish or fall.”

Tesla was just added to the S&P 500 Index last Monday, and according to Farr, its price is still highly overvalued. “The current valuation makes Tesla the sixth-largest company in the S&P 500, and by any metric, shares of this company are expensive,” he writes.

Farr also is an author, a CNN and Bloomberg commentator, and president of investment firm Farr, Miller, & Washington.

Points To Bear In Mind: Farr does not exclude the possibility that Tesla will become a fabulous long-term investment, but he says it’s more likely to go down.

If you consider buying Tesla, think about these two points, the analyst writes: “All else equal, when you buy stocks at high valuations, your expected future returns are going to fall.” And secondly, "all high-growth companies begin trading in anticipation of huge future growth."

When asked at CNBC's Power Lunch if he's going to buy Tesla stock, he replied, “no, not on your life.” 

Price Action: Tesla stock fell 0.27% and traded at $660.00 in the after-hours markets on Thursday.