Despite bullish sentiment surrounding Tesla, the automaker still needs to grow its fundamentals and earnings power, Oppenheimer senior analyst Colin Rusch told CNBC on Thursday.
Rusch said that at the moment, Tesla's stock is simply moving on anticipation.
"This is an incentive-driven story, and we have to look five, 10 years out. But at some point you have to come back to reality. Are you generating real returns on capital?" Rusch said on "Squawk Box."
His comment came after Tesla posted fourth-quarter results Wednesday, reporting a wider-than-expected loss.
Chairman and CEO Elon Musk said Tesla will likely seek more capital from investors, to hedge against risk as it completes its buildup of its Model 3 sedan.
Rusch said he's on the sidelines with the company.
"The real story is about whether they will get the Model 3 out on time and what the leverage is," Rusch said.
Disclosure: Oppenheimer makes a market in the securities of Tesla.
— CNBC's Robert Ferris contributed to this report.