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Elon Musk 'burns up cash' for SolarCity, Tesla: Pros

Two key components of Elon Musk's empire are under pressure, and some analysts don't see relief in sight anytime soon.

Shares of SolarCity and Tesla Motors, both co-founded by Musk, have taken hits recently. Tesla, once a darling of Wall Street, is down more than 16 percent in the past month alone despite a warm reception for its Model 3. Meanwhile, SolarCity was walloped this week after quarterly earnings fell short of market estimates.

UBS auto analyst Colin Langan, who has a "sell" rating on the Tesla, thinks the luxury automaker will be facing some stiff competition in the next few years from Mercedes, Porsche and Audi. BMW is also pushing to get a luxury electric sedan on the road by 2021.

For those reasons, Langan believes Tesla is overvalued. He also takes issue with the company's aggressive production target of 500,000 cars by the end of 2018. Tesla own estimates for production were bullish. It cited demand for the Model 3, its mass-market car expected to hit in 2017.

"That's a very aggressive target, even for any established automaker, so I think that's very tough to achieve and that's going to put the stock at risk," he said in a recent interview with CNBC's "Power Lunch."

"And there's a question of can they actually continue to grow, given they already have actually pretty good share in the high-end luxury sedan segment."

Tesla shareholder Drew Cupps, chief investment officer of Cupps Capital Management, admitted there are not a lot of catalysts for the electric carmaker, even as it moves ahead with its hotly anticipated battery factory.

"We're going to keep ramping the [Model] X. We're going to keep making progress with the gigafactory. I suspect we're going to get financing in here. Maybe sooner rather than later, all those things, I think, will tend to be positive for the stock," he told "Power Lunch."

Clouds gather over SolarCity

Meanwhile, SolarCity plunged after the company reported a wider-than-expected quarter loss and gave disappointing guidance Monday. The solar power company is down about 63 percent year to date.

"The real problem is this is a company that had massive growth, from 2013 to 2015, over 5,000 percent compounded annual growth. Then in 2015 the growth started to slow," said Gordon Johnson, managing director at Axiom Capital.

He takes issue with the company's play on words.

"They are defining things differently than you typically define things in economics. One of the major problems is they've redefined how you calculate their costs; they've redefined how you should look at their revenue," he explained.

"You have a business where you burn a ton of money but you just issue debt, and that means you are generating cash. And that is really the concern that investors have."

Earlier this week, CNBC's Jim Cramer took the company to task after it held the "worst conference call of 2016."

Cramer told "Squawk on the Street" that SolarCity "is a company that I regard in a first-class crisis that acts as if everything is fine."

CNBC's Phil LeBeau, Jacob Pramuk and Fred Imbert contributed to this report.

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