Tesla's market-crushing performance this year will not last, according to one Wall Street firm.

Jefferies told its client to avoid the electric car maker's shares, saying the company's financial performance will be weak in the coming years.

"It is with a bit of a heavy heart that we initiate coverage of Tesla at underperform," analyst Philippe Houchois wrote in a note to clients Tuesday. "Achievements to-date and vision are impressive, but we don't think Tesla's vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply."

The analyst set a 12-month price target for Tesla shares at $280, representing 27 percent downside from Monday's close.

Houchois predicts Tesla will continue to lose money on an annual basis through 2019. He has "doubts about Tesla's ability to generate 30+% gross [profit] margin required to support its vertically integrated business model in distribution/supercharging."

The electric car maker's shares are outperforming the market this year, up 80 percent year to date through Monday compared with the S&P 500's 12 percent return.

"Given capital intensity, we don't think DCF [discounted cash flow] can justify the current valuation, let alone upside," he wrote. "We appreciate the growth upside from a brand whose reach goes well beyond auto markets and that valuing Tesla today assumes some form of 'steady-state' that is unlikely to happen anytime soon."

Tesla did not immediately respond to a request for comment. Its shares are down 2 percent in the Tuesday premarket session after the call.



— CNBC's Michael Bloom contributed to this story.