Tesla Motors appears to have growth in its future, but its stock valuation has run too far, Efraim Levy of S&P Capital IQ said Wednesday.

"We like the fundamental story. We see plenty of growth for the electric vehicle industry for this company, and we think that they're becoming profitable now and there's going to be a lot of profitable growth," he said.

"However, the valuation, as you indicated, is a concern. We're pricing in a lot of good news that has to come through."

Levy is initiating coverage of Tesla Motors with a "sell" rating on its stock and a $150 price target.

The call came a day after Wedbush Securities analyst Craig Irwin issued an "outperform" rating on Tesla shares and a price target of $240, based in part on a survey of potential auto buyers.

(Read more: Why I upgraded Tesla stock: Wedbush analyst)

On CNBC's "Fast Money," Levy said that there was a danger of too-high expectations.

"Do you want to get in front of a runaway train, or do you reach across the tracks to try to reach the pot of gold?" he said.

Levy added that he had previously given the stock generous growth projections.

(Read more: 'There is not any fear now' in the market: Jon Najarian)

"But I just found it was more difficult right now to say to an investor, 'You should hold the stock,'" he said. "We think that there's risk to the downside to it."

—By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.