Tesla stock (TSLA) rallied on Wednesday after three days of steady declines, and the continuing debate over how much it’s worth now again emphasizes how polarizing of a stock it is. Bernstein admits to its analysts being split over Tesla stock (TSLA) and published an interesting note in which two of its analysts go head to head.

But what is perhaps raising even more eyebrows than that is one analyst’s “blue sky” valuation of Tesla stock (TSLA), in which he sees it as being worth more than $500.

Tesla stock TSLA
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Tesla stock (TSLA) price target at $368

Baird analyst Ben Kallo is entirely focused on the Model 3 launch, which is slated for July. His current price target for Tesla stock is an ultra-bullish $368, which is certainly one of the highest on the Street, if not the highest. He adds, however, that the key is for the automaker’s management to hit all of their targets.

Unfortunately for his thesis, Tesla CEO Elon Musk himself has acknowledged that hubris caused them to make things hard on themselves with the Model X production, and the company has missed other targets in the recent past. Then again, Kallo freely calls this his “blue sky” thesis.

The analyst believes the company will have an easier time selling the Model 3, the rumored Model Y and other future products, noting that Consumer Reports recently named Tesla the top American car brand along with Porsche and Chrysler. The magazine cited high owner satisfaction, among other features.

How Tesla can reach a $566 stock price

A stock price of $566 assumes upside of more than 80%, but Kallo set out the steps he feels Tesla must take in order to achieve that level. For one thing, he said the company must sell 1 million vehicles in 2020, including the Model 3, Model S, Model X and Model Y, at an average selling price of about $52,000.

His $566 price also assumes 15 GWh of battery production sold at an average selling price of $500 per kWh and 800 MW of solar modules sold at a gross margin of 20%. All of this amounts to about $62.4 billion in total revenue. He’s also modeling an operating margin of about 11%, which is lower than Tesla’s long-term target in the mid-teens.

Kallo adds that his “blue sky” price target for Tesla stock doesn’t include any potential revenue from the ride-sharing program Tesla management has discussed (and which Morgan Stanley has been banking on for a long time). It also doesn’t include any other products like the upcoming Tesla Semi. Further, he sees an even more bullish $707 price target for Tesla stock if it can manage to do all of this and with an operating margin of about 14%.

Back to reality for Tesla stock (TSLA)?

It seems unclear how Tesla will have the capacity to produce 1 million vehicles by 2020, which is a key component of his blue sky thesis. Nonetheless, his arguments highlight a bull thesis that some would say is divorced from reality. Even Morgan Stanley analyst Adam Jonas has started to loosen his grip on the bull thesis for Tesla stock, although he still likes the company.

There was certainly a time when Tesla surprised the skeptics and pulled off targets that most said it could not do, but something changed a few years ago. A company that shocked everything with what it was able to accomplish started to miss its targets, and it hasn’t really recovered its position, or at least not yet anyway. Musk himself again said recently that Tesla stock is overvalued right now, as even he noted that the company is not profitable.

Tesla stock (TSLA) closed up 2.09% at $310.22