Tesla shares are down nearly 20 percent so far this year and at least one analyst believes there's more pain to come—and most of that has to do with one of the company's latest models.
CLSA Americas Analyst Andrew Fung, downgraded the stock to an "underperform" rating from an "outperform," while slashing his price target down to $220 from $275. His biggest concern? The Model X.
The new car will be Tesla's first attempt at a sports utility vehicle. CEO Elon Musk has promised a car that will be able to seat seven adults, will have improved all-wheel drive and will be equipped with falcon–winged doors.
"Some of the misconception really is that while the Model X is a derivative of the Model S sedan, there are other complexities in the new design so initial margins may not be as strong as what investors are anticipating, " Fung told CNBC's "Fast Money" this week.
He added in his note that lower initial Model X margins are likely to hurt earnings in the short term, and limit upside potential in the stock.
Read MoreWhy these pros are bullish on Tesla
The launch of the Model X has already been plagued with multiple delays since its original target of late 2013. The X's first customers could start receiving cars as soon as this summer. However, CEO Elon Musk remains bullish on the car.
During the company's fourth quarter earnings call last month, Musk stated he expects Model X production to soar next year—predicting that demand could send production well above 20,000.
Yet analysts are not as cheery. Fast Money trader Steve Grasso of Stuart Frankel echoed Fung's concerns, adding that he intends to stay away from the trade.
"Margins are going to shrink even further, because there's a tremendous amount of competition that wasn't there before," Grasso said. "They were the only cool guys on the block that built an electric car and now everyone is doing it."
Guy Adami of Private Wealth Advisor Group thinks that based on technical levels the stock is heading south. "Lower [intraday] lows, lower highs. I've said it for a while now $220 has been support on the way down and resistance on the way up,"he said.
"I think it's going to trade the May low which is $177," Adami added.
Still, Fung's note on Tesla suggests investors may not want to get overly pessimistic. The note, called 'For the patient investor,' adds a caveat: "Longer term though, we continue to believe the stock is attractive."
Fung believes that investors may breathe a sigh of relief if Tesla delivers on its first quarter guidance of 9,500 car deliveries. Plus, he believes the China market could begin to pay off for Tesla in 2016 despite challenges there. The road ahead for Tesla investors may be long, but the question remains if it's worth the journey.