Elon Musk, co-founder and chief executive officer of Tesla Inc., speaks during an unveiling event for the Tesla Model Y crossover electric vehicle in Hawthorne, California, U.S., on Friday, March 15, 2019.

Morgan Stanley has an equal weight rating and a $230 price target on Tesla, just above the stock's Tuesday close of $224.74 a share. Jonas has had a mixed bag of analysis on the electric car maker. At the same time, the stock has traded with equal swings of fear and jubilance: The month of May saw Tesla shares crater to their lowest level in over three years, before rebounding more than 25% in just a couple weeks.

"We continue to believe Tesla is fundamentally overvalued, but potentially strategically undervalued," Morgan Stanley analyst Adam Jonas said in a note Wednesday.

Tesla shares are nearing Morgan Stanley's price forecast, but the firm isn't sure how to tell investors to value Elon Musk's company from here.

On May 21, Jonas slashed his worst-case forecast for Tesla to $10 a share, saying there's reason for concern due to the company's increasing debt and possible lack of demand in China. The next day Jonas told clients that Tesla is "not really seen as a growth story" and instead appears more "like a distressed credit and restructuring story."

But Jonas has stuck to his $230 price target. While he's raised questions about key parts of Tesla's business, the analyst has simultaneously declared that investors "underappreciate" the company's self-driving unit. Additionally, in a note at the beginning of this month, Jonas pointed to Tesla's demand in May as demonstrating how the company continues "to extend its lead vs. a still-small group of true [electric vehicle] competitors."

Jonas said in Wednesday's note that, despite the risk to the company's core business and opportunity from its potential, "the stock market has done a good job pricing in the confluence of both factors."

Jonas cited Musk's recent bullish statements about the company's coming second-quarter earnings report as a catalyst for Tesla's recent stock recovery. While Jonas warned that monthly data about Tesla sales "is prone to volatility and revision," he said the metric of deliveries "is likely to be the top driver of short term and rest-of-year share price performance."

– CNBC's Michael Bloom contributed to this report.