What happened

Tesla (NASDAQ:TSLA) has had a tremendous year so far, with its stock nearly quadrupling in value. At a share price of more than $1,600 today, however, Tesla is looking like a ripe target for Wall Street analysts, because at valuations this extreme, the downside is great, and the risk of missing out on a rally looks limited.

And judging by today's price action, they may be right. As analysts lined up to take their swipes today, Tesla shares tumbled more than 5%, settling a bit to a 4% loss as of 3:10 p.m. EDT on Tuesday.

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

What are analysts complaining about this time? There are really only two notes worth discussing today, from JMP Securities and GLJ Research.

JMP struck first, downgrading Tesla to market perform this morning, according to TheFly.com, on worries that "any immediate-term success that Tesla may discuss on its earnings call on Wednesday is now fairly reflected in the stock."

The analyst still likes Tesla a lot, and believes that five years from now, it could be a $100-billion car company. JMP's objection is simply that at a market cap of more than $300 billion today, there's no "reasonable basis arguing that the stock should be valued above current levels." (So best case, Tesla holds on to its value for the next five years. Worst case, it loses it. That's JMP's argument.)

GLJ Research, on the other hand, is feeling even less charitable toward Tesla. In a note this afternoon, GLJ warns that whatever Tesla reports tomorrow, investors should take it with a grain of salt because Tesla has apparently been offering discounts on its long-range Model 3 cars for sale in China, in order to push its numbers higher.

Specifically, GLJ cites local Chinese media reports to suggest that Tesla may have negotiated a large "fleet sale" of Model 3s to a buyer in China, and that said buyer is now turning around and flooding the market with discounted Teslas on the Pinduoduo (NASDAQ: PDD) e-commerce site.

Now what

GLJ notes that Tesla denies any such thing is happening in China, but the analyst doesn't seem convinced.

Is GLJ right to be skeptical, or is it being overly cynical about a stock that has performed fabulously this year? Well, if Tesla reports tomorrow that it's doing just fine on car sales, but that for some mysterious reason its gross margins take a hit, then the sale of discounted fleet cars would be one possible explanation. On the other hand, if both sales and margins hold up, today's sell-off could all turn out to be much ado about nothing.

One way or the other, we should all know the answer in just a few more hours. Tesla reports earnings after close of trading Wednesday.