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Bet on Tesla ahead of unveil? Pros disagree

With shares of Tesla Motors rising after the electric automaker's CEO hinted at introducing new technology next week, two pros disagreed over whether the stock was overvalued or not.

"Elon Musk is a visionary leader. I think this is a transformative company. But they'd have to sell half a million cars a year within the next seven or eight years, up from a current 35,000, to even trade at a healthy premium to automobiles," Zachary Karabell, head of global strategy at Envestnet, said in an interview Friday with CNBC's "Closing Bell."

However, Colin Rusch, senior analyst at Northland Capital Markets, thinks there's another 500 to 700 basis points of margin growth just on Tesla's core product offering.

"We think these guys can potentially reach 40 percent gross margins, so the earnings trajectory on this stock is well beyond what must people are thinking about as they grow up to that 50,000 car level over the next four to five years," he said.

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Tesla Motors CEO Elon Musk.
Toru Hanai | Reuters
Tesla Motors CEO Elon Musk.

On Thursday, Elon Musk tweeted, "About time to unveil the D and something else." There was a photograph of the front of a vehicle pointing out of a partially opened garage with a large letter "D" on the front of it.

Rusch speculated that it could be a new sports car, motorcycle or base fleet vehicle.

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"The important thing that we think here on this stock is that they continue to evolve the product portfolio. A big value proposition here for us is that they built a foundation where they can develop products quickly and cost-effectively," he said.

"Whatever it is, it will probably be magically creative and [have] absolutely zero revenue in the near future," Karabell quipped.

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Shares of Tesla closed at $255.21 on Friday, up about 1.5 percent. On Sept. 5, when the stock was trading around $286 a share, Musk called it "kind of high right now."

—The Associated Press contributed to this story.

Disclosures: Northland Securities makes a market in securities of Tesla. Northland Securities intends to seek compensation for investment banking services from Tesla in the next three months.